As concerns fade over new taxes for the wealthy and on foreign buyers, prices of central London homes are expected to rise by four percent next year, up from the previous forecast of two percent, according to Jones Lang LaSalle.
Prices in neighbourhoods like Mayfair, Chelsea and Knightsbridge are expected to rise six percent in 2013, the property consultancy said, revising its November projection of little or zero growth for the year.
The new forecast comes as buyers remain undeterred by the curbs imposed on foreigners or the upcoming mansion tax, said Adam Challis, Head of Residential Research at Jones Lang LaSalle.
UK Finance Minister George Osborne raised the stamp duty on residential properties sold for over £2 million (S$3.9 million) from the previous five percent to seven percent in 2012. The opposition Labour Party has called for additional tax on such homes to offset income tax cuts.
A mansion tax is also expected to be introduced after the 2015 general election. However, investors may likely view it as an incremental addition to council tax, Challis noted.
The revised forecasts were also attributed to strong demand for London properties due to a weak pound, the city’s economic recovery, as well as political and economic turmoil in the home countries of some investors.
At the same time, both Savills and Knight Frank have also raised their forecast to six percent after they projected that home prices in London will see little change this year.
Romesh Navaratnarajah, Senior Editor at PropertyGuru, edited this story. To contact him about this or other stories email romesh@propertyguru.com.sg
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