However, in the current sales market, Black Brick notes a continued shortage of buyers of 'trophy homes' and an increased interest in commercial property.
Camilla Dell, Managing Partner at Black Brick, comments: “We continue to see some clients shrugging off the three percentage point rise in stamp duty as simply a part of the cost of acquisition. Rising rents will also go some way to offset these additional costs. The fact of the matter is that London remains an attractive city in which to invest, and that isn't likely to change.
Certainly, the recent increases in stamp duty and the planned reduction in mortgage interest tax relief will likely see institutional investors or wealthier high-net worth individuals, rather than individual investors, provide much of the capital needed, but we also expect individual investors to remain active in this part of the market.
The recent falls in sterling have made investing in the UK more attractive, we're talking to dollar-based investors in the Middle East who are looking closely at London again and there is little sign of London's perennial attraction fading among international high-net worth investors (HNWI). Saudi Arabians are particularly active as the wish to get their assets out of the country in light of the recent instability. Savills recently found that London and Dubai remain top of the list for HNWI real estate investment, with both cities expected to be “net buys” in 2016.
Although we continue to see a drop off in 'trophy home' (over £10m) buyers, particularly from countries like Nigeria and Malaysia, who are affected by the drop in oil price, we are busy with clients with budgets of £500,000 - £2m. We are also busy with clients looking to invest in commercial property, rather than residential, during the current difficult market.”
