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Luxury London property sales slump by a quarter

A report sent to the government has found that sales of high-end central London properties has dropped by almost a quarter since the last budget.

The data was gathered by Lonres and compiled by London Central Portfolio, a specialist asset manager.

LCP found a 23 per cent reduction in central London property sales worth more than £2m, which it says is worth an estimated £0.5bn in investment, since March this year.

Construction News reported back in July that the housing slowdown was beginning to affect the London market, with house prices only rising 0.1 per cent in the month.

The asset manager told HMRC and the Treasury that 50 per cent of central London residential was bought for rental investment, rather than for owner occupation.

The budget saw Stamp Duty Land Tax rise from five per cent to 15 per cent for companies buying residential properties worth more than £2m, as well as a £140,000 annual charge and capital gains tax on the sale of property.

Backing up the figures were findings by Knight Frank Prime Central London Index that a 29 per cent drop had been sustained in property exchanges worth between £2m and £10m in the three months to the end of July.

According to LCP, the changes are costing the economy £120m each year, while reducing the tax take by £1bn and only bringing in £270m.

The company also says the budget has led to increased rents and investor flight, with mobile corporations moving to other areas of the world.

LCP CEO Naomi Heaton said the moves had sent “the clear message that Britain is no longer ‘open for business’”.

“Investors who would have previously bought for over £2m are now evaluating and considering other options. The government have failed to recognise that PLC is a bona fide global business and if the numbers don’t work, investors will go elsewhere.”

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