November Budget Looms
Barely a day passes without fresh speculation about Rachel Reeves’ fiscal plans – from an annual tax on property valued above £500,000 (or £2m according to some sources) to murmurings of a broader wealth tax.
Such uncertainty is another reason for discretionary buyers, who make up a greater proportion of Prime Central London’s market, to continue a ‘wait and see’ approach into 2026.
As has been the case since starting Perrygate in 2018, we expect more market resilience in neighbourhoods with a greater proportion of domestic, needs-based buyers – such as Islington, Hampstead or Clerkenwell.
For those committed to buying, there will always be a need to accept some uncertainty. The last time we saw anything resembling a normal market was before Brexit and Covid. After November’s budget passes, we’d expect an even stronger focus in the media on the much discussed AI bubble.
Opaque Bidding Wars
Throughout the Autumn, we advised several clients on a ‘Negotiation Only’ basis when they had already identified a property.
In one bidding scenario we were told another party had also offered but the agent gave inconsistent answers on the nature of that bid. We recommended our clients didn’t increase our initial offer. Two months later it’s still on the market while we helped our client secure something better.
On another property, we were told our offer was marginally the highest but the seller wanted to go ‘Best and Final’ offers. We did not increase our offer. 24 hours after the deadline, the agent asked if we would like to pursue our interest.
Both examples highlight the importance of grounding offers in data and maintaining a healthy scepticism about the seriousness of competing bids. In the UK the selling agent is allowed to be cagey about the nature of other offers (after all they are acting for the seller) and there is no transparent bidding system in standard negotiations.
Planning Rules Softened
In an attempt to kickstart London’s stagnant development pipeline, affordable housing requirements for new build developments have been eased. Previously, 35% of housing in a new development had to meet the ‘affordable’ criteria.
This is welcome news as any new build property completed in London provides housing and generates significant tax revenues for the government. The affordable housing requirement always felt like state overreach. Hopefully this means there will be more cranes on the skyline in the coming years.
If you are considering buying a new build in London, we have covered the pros and cons here.
Buying system overhaul?
It’s fair to say the buying system in England & Wales is one of the most inefficient in the developed world. Uncertainty is constant until exchange of contracts, typically months after a sale has been informally agreed.
The government is setting out reforms for England and Wales’ house buying process. It is set to put a greater emphasis on the seller and estate agent providing material information up front.
If implemented correctly such reforms would go a long way to professionalising the process and helping buyers better understand what they are offering on. However enforcement of any new reforms will be key. Agents are currently required to publish service charge and ground rent information for any listing but many listings in central London still omit this information or use an incorrect placeholder figure.
