Crayson covers Holland Park, Notting Hill and Kensington. Nick Crayson is the founder.
The Notting Hill area saw its first post-war renaissance start in around 1999 – the time of the release of the eponymous movie which brought considerable media attention to the area. The neighbourhood is still undergoing seismic change and over the past few years the renaissance has stepped up considerably as buyers from all over the world have sought to make this area their home.
There has been considerable price growth throughout our market area over the past 10 years of around 130% on average and over the past three years we are looking at around 50% house price inflation. Buyers at the upper end of the market — purchasing homes at over £5million — are currently paying 12.5% per foot more than they were a year ago.
However, while the much anticipated bursting of the prime London property bubble failed to materialise, the second half of 2014 did see prices fall as more stock reached the market and the number of buyers receded. Average prices so far in 2015 are 9.6% down on the peak in July 2014 and 0.7% lower than at this time last year.
Properties selling at under £1million, most of which have benefited from the stamp duty changes and avoid potential ‘mansion tax’ liabilities, have seen the highest growth. Average values have increased by 10% in the last 12 months.
The now imminent election has destabilised the property sector quite considerably. It is not unusual for transaction levels to be more subdued in the months preceding a general election. However, the lack of clarity over the potential cost to owners of higher priced properties seems to suggest that the slowdown began earlier than expected. Some purchasers are delaying their decision to buy and the volume of houses sold over the last three months is down 25% compared to the same period last year.
With the financial implications of the new stamp duty thresholds and potential ‘mansion tax’ having less of an impact on homes selling at under £2million, this sector of the market remains more buoyant. Homes sold for less than £2million account for 72% of sales in the last three months compared with 65% over the same period last year.
The recent policy announcement by the Labour Party that they would scrap the Non-Dom tax status in the UK has caused further disruption. There is no doubt that such a move could seriously undermine the property market in London and there is considerable nervousness in the sector on the net effects of this policy.
Both the Conservative and Labour have announced policies aimed at helping first time buyers. The Labour Party has mooted removing stamp duty on purchases below £300,000 – whilst the Conservatives have proposed raising the inheritance tax threshold to £1million. The latter could have a significant trickle-down effect – leaving sufficient equity in properties to pass on, whilst still enabling the older generation to release equity – vital in this low interest rate world that we find ourselves in.
The ‘mansion tax’ has been a spoiler of the market for almost a year now. The party which proposed it – the Liberal Democrats – have changed tack and are now in favour of a council tax revaluation. In a recent survey the British Property Federation found that 69% of MPs favoured council tax revaluation over a ‘mansion tax’, including 39% of Labour MPs – the only party now proposing the tax in the manifesto.
Whatever the results of the election, Notting Hill and its surrounding areas are still set to continue to attract high end families and we very much expect the trend to continue when it comes to the medium and long term prospects of the area.
Nick Crayson, founder www.crayson.com
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