Spring Market Update

Spring 2021 Market Update

A Budget to Support the Market 

Rishi Sunak’s Spring Budget was a positive one for the property market.

Throughout Q2 and Q3, the government will continue to support the housing market with a range of measures. It clearly sees doing so as central to a sustained economic recovery. 

The extension of the current SDLT holiday until June, after which point it tapers off, will support transaction levels throughout the UK. Of course, a maximum saving of £15,000 has a far smaller impact on central London but it does appear to be supporting market sentiment. 

The introduction of 5% mortgages through a government backed Mortgage Guarantee Scheme and the emergence of 40 year fixed mortgage products will further bolster demand. 

It was perhaps most notable what wasn’t in the budget. There was no mention of Capital Gains Tax on residential homes or any form of property wealth tax.

Such news combined with the performance of the market has seen Savills revise their market predictions. Over the next five years, they now foresee 21.6% capital growth in Prime Central London. Our personal view is that PCL, compared with much of outer London, now represents real value. Retained clients with intimate knowledge of the top end of the market in other global cities are taking the same view. Knight Frank reported that ultra high-net-worth individuals bought more property in London than any other city last year.

New Non-Resident Tax 

One tax deadline not extended was the introduction of a 2% surcharge for non-UK tax residents on April 1st. 

Perrygate completed on purchases on both sides of the deadline with offers factoring in whether the 2% was payable. While this surcharge is an inconvenience, it only places London’s international tax regime in line with other global cities. We do not see it being a long-term deterrent to overseas buyers. However it will likely have a greater effect on the prices in the PCL’s apartment market – particularly in the £2m+ range.  

Successful Remote Purchases

For obvious reasons, there are few international buyers on the ground in central London. It is unclear whether they will be able to return in full force this year. 

At a time of limited travel, a buying agent can gives clients off market access and first-mover advantage. In addition to our work for domestic clients, we have recently secured properties for remote buyers in Hong Kong, Singapore and the US. In each case, our attention to detail and expertise gave them the confidence to proceed. No matter a client’s budget, there is no perfect property. A good buying agent will outline the downsides of a property so clients have a full picture and know if it is the right one. 

Several clients have taken advantage of a quieter market and purchased remotely.

Prime Central London – A Two Speed Market 

Our clients naturally want the best their budget can afford and we search for best-in-class properties for any budget. Particularly in Prime Central London, there is a very clear distinction between such properties which are achieving close to asking price and struggling stock languishing on the market for up to a year – often reappearing in various guises with different selling agents. 

While we are certainly not in a universally ‘hot market’ – there is some gazumping for excellent properties which are in short supply. Part of a buying agent’s role is mitigating this risk. 

As the FT recently reported, the capital’s various house price indices are all flawed in some way. A buying agent on the ground who is putting forward offers on a weekly basis and accessing live price information can give clients the confidence to know they are not overpaying in a fragmented marketplace. 

Diverging Sales and Rental Markets 

The key theme of London property post-Covid has been the differing fortunes of the rental and sales markets. While London house prices have grown over the past 12 months, the rental market is volatile and struggling overall.

Nevertheless, we have recently secured properties for several investor clients.  To ensure our clients clearly understood any opportunity, we provided conservative rental estimates reflecting what was happening in the market. Our due diligence extended to investigating the flexibility of rental asking prices on comparables in the same neighborhood right up till exchange of contracts. 


If you are looking to buy in London this year and would like to discuss your search, contact us on 0208 0880 552 or [email protected]