September Newsletter

It’s been a very interesting month for property in London. A mini budget was announced last Friday which didn’t have a huge impact on stamp duty tax unless you are considered as a first time buyer. The pound continues to fall, dropping to $1.03 on the morning of the 26th of September, before recovering to $1.07 that same afternoon. One can argue that until now, there never has been a better time for a buyer with USD currency.

Dropping pound – prime time to buy

Many of the clients I work with are overseas buyers – a question they always have is if now a good time is to buy. That’s always a tricky question to answer as no one has the power of a crystal ball, however today’s market it is a relatively easy answer in my opinion; yes. The pound is at a historic low – making buying London property significantly more affordable for those buying in dollars.

The head of research at Hamptons has given a perfect example of this in an article in The Times – “effectively, a buyer purchasing a £1 million house in the UK in dollars today would save about 16 per cent, or £164,000 compared to last year. This is solely down to currency changes”. This is one of the reasons that foreign buyers finally returned this year – 48% of the prime central London buyers were foreign, which is 13% higher than last year. For the more expensive homes in the top end of the market, the saving could be millions of pounds.

The below table from Knight Frank shows the discount levels when factoring the drop of the pound and drop in property prices in prime central London (PCL). According to this graph, buyers today are saving from 38.9% compared to 52.6% in the PCL market.

Despite the drop in the currency, asking prices in the UK rose by 0.7% in September, according to Rightmove. The search portal also stated that buyer demand is 20% higher than before the pandemic. This lack of stock on the market is likely to support the market through the potential looming recession.

Stamp Duty

Last Friday’s mini budget announced a break on stamp duty – although this will have only have a significant impact on fire time buyers. Previously, buyers paid no stamp duty on the first £125,000 – this has now doubled to £250,000. While this is welcomed, it will not have a big impact as the most these buyers will save is £2,500. First time buyers used to only not pay tax on the first £300,000 – this has been increased to £425,000. First time buyers will have a much large saving - £11,250. I do not believe this will have a huge impact on the prime central London market.

Property of the month

Onslow Gardens - £2,750,000

This month’s property of the moment is a fantastic flat represented by Hamptons on Onslow Garden’s – a classic South Kensington address. The flat is on the top floor of a period building and benefits from two fantastic roof terraces. The flat has three bedrooms and is finished to a high quality throughout. The building benefits from a lift.

This would be a great home for someone who is looking for the typical London flat in a quintessential address. It is around all the best South Kensington has to offer, however is also very close to the tube so the rest of London is on the doorstep.

If you are interested in this flat or purchasing a property in London, please send an email to iyad@iyadgrahne.com for a free consultation.

September Newsletter