The Autumn Statement at the end of 2015 announced a 3% stamp duty surcharge on additional properties (including buy-to-let properties and second homes) to be payable on completions from 1st April 2016 onwards. The detail of the final policy will become clear in the March Budget following a consultation on possible exemptions for corporates and funds owning over 15 properties. The higher stamp duty charges will apply to sales over £40,000 and would almost double the payment on an average London property sale (an extra £15,423 on top of the initial £15,705 based on the average London property price of £514,097).
Inflation rose to 0.2% in December, the highest level all year. However, this still remains some way short of the 2% target rate and, while wage growth remains sluggish and the economy continues to grow at disappointing rates, the Bank of England has ruled out an immediate rise in interest rates. A rate increase now looks more likely to come in the latter stages of the year or even in the first quarter of 2017.
Uncertainty across the world’s financial markets, falling oil prices and the economic slowdown in China may affect demand for central London properties in the short term. However, the security of investing in central London property may come to the fore again as buyers take refuge from other unstable assets and markets.
- Autumn Statement 2015
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