San Francisco, CA (PRBuzz.com) January 23, 2013 -- Bloomberg reported in early January, citing Knight Frank's Housing Market Forecast, that London's most high-brow residential properties are likely to outperform the rest of the United Kingdom's housing market. Cash-rich investors will likely have no qualms with the property-tax increases, and continue to invest heavily.
Knight Frank's, which is a London-based real estate consultancy, noted that prices for the higher-end housing market above 10 million will peak as high as 5% in 2013. Last year buyers were competing for less properties still pushed value up almost 7%.
Liam Baily, head of the residential research at Knight Frank, stated: "The demand for luxury London homes from overseas buyers looking for a safe-haven for their money, as well as a slice of London life has helped drive price increases. This growth might have continued into next year, albeit on a more modest basis as prices bumped a 'natural ceiling', but government policy is set to have an impact on the market next year."
A high percentage of luxury homes within the U.K. Are owned by shell companies that are set up as tax havens I order to avoid the transaction fees as well as remain anonymous. Due to the ongoing effort to help lower the U.K's record budget deficit, Chancellor of Exchequer, George Osborne, announced measure that would target these types of companies.
In Britain's 2012 budget, Osborne introduced 15% stamp fee on real estate assets that were purchased by foreign companies. The tax on all property sold at more than £2 million would be upped 7% from the previous 5% marker. Stacked onto that would be home values at £2 million or more that were owned by offshore companies would be hanged to £140,000 in tax, and a capital-gains tax on home sales by owners who were non-resident and non-naturalized would also be implemented on homes of £2 million.
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