Post-election property data

Prime Central London Index
Buyers digest Stamp Duty rise and strong price growth in Prime Central London

Price sensitivity grows as concerns over the proposed Mansion Tax are replaced by a more sober assessment of increased stamp duty costs.

Additional findings:

  • Annual growth slowed to 2 percent in June from 8.1 percent a year earlier
  • Annual growth is likely to hit a low this summer but remain positive for the year
  • Buyers increasingly price sensitive after 42 percent growth in the last five years
  • The number of new prospective buyers and sellers points to an ‘expectation gap’ around pricing
  • Higher stamp duty rates for £1.1 million plus properties has moderated activity

Tom Bill, Knight Frank’s head of London residential research, comments:

“The initial expectation from many market observers was that the arrival of single party majority Government would stimulate activity. Early evidence is not yet confirming this prognosis.”

“The number of new potential buyers registering with Knight Frank in May was at its lowest monthly level in 2015. Meanwhile, the number of inspections of potential new properties for sale, a lead indicator of supply, was at its highest level this year in May.”

“While this pattern follows a broad seasonal trend, the absence of any marked reaction to the general election in the three final weeks of May underlines the presence of an ‘expectation gap’ between buyers and sellers.”

Edinburgh City Index
Edinburgh City Market Still Absorbing Tax Change

The introduction of Land and Building Transaction Tax in April has been the primary driver of the Edinburgh city market in the second quarter.

Additional findings:

  • Prime property prices rose by 0.4 percent in Q2
  • Annual growth slowed to 3.4 percent from 5.7 percent in June 2014
  • The introduction of LBTT has moderated activity in the prime market
  • Receipts from the new levy totalled £18.4 million between April and June

Oliver Knight, Residential Research, Knight Frank, comments:

“This slowdown in price growth can be attributed to the introduction of the new Land and Building Transaction Tax (LBTT) in April.”

“The levy, which replaced stamp duty on all residential property transactions, means that those purchasing property with a value above £333,000 now pay more in purchase taxes.”

“As a result, there was a spike in prime transactions in Edinburgh ahead of the introduction of LBTT. Since then however, there has been a fall in prime transaction levels in the city, with Knight Frank figures showing a drop in sales in the second quarter compared to the same period of 2014.”