Luxury-home sales in Central London's best districts dropped to their lowest level in seven years in January as buyers awaited the effect of pending stamp-duty tax changes and sellers only slowly cut their prices.
A total of 167 existing homes were sold in neighbourhoods including Kensington, Chelsea, Mayfair and Westminster last month, 30 per cent below the average volume for the time of year since 2010 and the weakest month since January 2009, according to data compiled by London-based broker Huntly Hooper.
Selling prices in Central London's best districts in January were 1.8 per cent above last year's average, according to Huntly Hooper. Meanwhile, asking prices are 19 per cent higher at record levels. "People are waiting to see what impact the stamp-duty change in April will have on the market," said Oliver Hooper, the broker's director.
Sales of luxury homes have slumped since Chancellor of the Exchequer George Osborne increased the stamp duty transaction tax to as much as 12 per cent for the most expensive properties in December 2014. From April, buy-to-let properties and second homes in the UK will be subject to a stamp-duty home-buyer tax 3 percentage points higher than those who are purchasing a property to live in.
Volatility in global stock markets may help boost transactions later this year as wealthy buyers seek a safer investment after selling equities, said Hooper.
Falling demand from Chinese and West Asian buyers will lead to a sharp downturn this year in London and New York's high-end residential markets, Blackstone Group LP Vice Chairman Byron Wien predicted in January.
