With the recent hike in Stamp Duty for purchases over £2m to an unheard of 7%, you could be forgiven for thinking that prices and demand may recede a little. It appears not. Prices increased by a further 1.1% in March (the fastest rate of growth since May 2011) and this was a month that had many ‘holding off’ to see what the Chancellor decided to do about SDLT or the much discussed ‘Mansion Tax’ – (Do let me know where you can buy a ‘mansion’ for £2m in London by the way)! Many had expected the market data to show a small fall to reflect the ‘wait and see’ stance adopted by many in the market but to show the strongest rise in nearly a year was indeed a shock. This means that prices have now risen by 11.3% over the past 12 months, and by 2.7% in Q1 2012. The volume of sales being agreed in the £5m+ bracket was up by 93% in Q1 2012 compared to the same period in 2011, and by 42% across prime central London. It would also appear that supply is failing to keep pace, with new instructions higher by just 12%, and down by 11% in the £5m+ sector. It appears that those wishing to sell are in no hurry and happy to wait until the right buyer stumps up the money. There are more people than ever looking to buy in Kensington and Chelsea and new buyer volumes rose 26% in Q1 2012 compared to the same period in 2011 showing that the attraction of this part of London, particularly to wealthy foreign buyers, remains undimmed.
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