As temperatures reach the mid twenties we have started to see the super-prime segment of the residential market cool down, in particular in the £20 million plus category where prices have softened. There are a number of factors that have impacted buyers’ confidence, which are not only restricted to the uncertainty surrounding the upcoming general election. While the new changes to Capital Gains Tax (CGT) on foreign corporate vehicles are generally accepted by investors, it is the annual property tax and stamp duty arrangements that have primarily influenced appetite together with the strengthening of sterling.
Having said that, there is still plenty of demand for correctly priced properties in all categories, and the market has seen a good deal of activity in the £3 million to £5 million bracket. Prices are still rising in the lower price brackets, where demand still exceeds supply. Average sales prices per square foot for properties under £2 million rose by 4.1% in the second quarter of 2014.
