Prices of high-end central London homes grew at their fastest rate in three months for September, driven by strong demand for properties exempted from a new and higher rate of sales tax, Knight Frank said.
Starting in April, Chancellor of the Exchequer George Osborne raised the sales tax for properties worth more than £2 million (S$4 million) from five to seven percent.
Sales of properties not covered under the new levy increased by 23 percent in Q3 compared to the same period in 2011. This pushed up the prices of homes in that segment by around 12 percent, noted Knight Frank.
In addition, foreign buyers contributed 41 percent of prime London property purchases for £1 million (S$2 million) or more, with Italians, Indians, Russians, US and French nationals being the largest overseas buyers.
Liam Bailey, Head of Residential Research at Knight Frank, said: “London’s market performance continues to be aided by overseas buyers, who account for more than 50 percent of buyers in the £2 million-plus market (S$4 million).”
At the same time, the average value of residential properties in London’s priciest neighbourhoods grew by 0.7 percent in September from August, according to an index compiled by the consultancy.
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