Lowering Stamp Duty

Alex Morton, the Head of Policy at the Centre for Policy Studies think tank argues in the report ‘Stamping Down’, that stamp duty has distorted the market to such an extent that the costs of cutting it are far lower than generally realised.

The report quotes evidence that shows that a 1% cut in stamp duty rates increases housing transactions by around 20%. It also shows that more housing transactions lead to more homes being built, as developers respond to market incentives and the fact that more people are in the market to buy new homes which makes it easier to sell new build properties.

The report carries on to say that ‘if  transactions were returned to their historic level through other reforms, the boost from stamp duty on top of this would be high, to the point where raising the SDLT threshold could be nearly cost-neutral if accompanied by a 3% surcharge on properties purchased by non-resident overseas buyers – i.e. as investments rather than homes to live in’.

Robert Colvile, Director of the Centre for Policy Studies, said: “It’s no coincidence that stamp duty is one of the taxes that people hate the most. It’s a huge barrier to people living in the kind of homes that best fit their families and their lives. And as our report has shown, the current sky-high levels are doing more harm than good.

“We urge the Government to take bold action to stamp down on stamp duty, and get the property market moving again.”

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Nicholas Candy eyes UK property group Capco

CGI of Capco’s Earls Court project in Central London

Further to some speculation over the weekend Capital & Counties Properties plc (“Capco“) announced this morning that a consortium led by Candy Ventures, an investment vehicle of Nicholas Candy, is in the early stages of considering a possible cash offer for the entire issued and to be issued share capital of Capco.

Earlier this year, Capco proposed to split its prime London estates of Covent Garden and Earls Court, then last month said that there was progress with parties interested in buying the Earls Court mega project.

UK-based Capital & Counties shares traded 9% higher this morning on the news reaching a market capitalisation of £2.1 billion.

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New JV for Hyde Park Residential and professional services firm

From left to right: David Borg (ARQ), Christian Farrugia (ARQ), Nicholas Portelli (HPR)

Hyde Park Residential has entered into a joint venture with Malta based ARQ Group, to establish Trafalgar Real Estate Developments Limited. This new UK registered company aims to introduce both Maltese and international investors to development opportunities in the London real estate sector.

Targeted development sites will be in and around Central London within the Greater London commuter belt, therefore having excellent road and rail connections. This focus is driven by the lack of supply of more affordable housing in Central London or that is within a reasonable commute to Central London. Demand is driven by a combination of first-time buyers as well as persons working within the Greater London area.

Hyde Park Residential is one of London’s leading, independent property advisory and acquisition firms. This year the company was included in the PrimeResi directory of 50 best buying agencies in Britain.

ARQ is a professional services organisation based in Malta, providing a wide range of corporate and advisory services to local and international clients operating within different industry sectors.

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Uncertainty persists but not for everyone

As talk of a ‘no deal’ Brexit (and now a general election) continue, and the trade dispute between China and the US carries on, it comes as no surprise that global financial markets are uneasy. Recent announcements of GDP contraction in the UK and Germany do not help either.

Despite this backdrop some investors are carrying on with business. Earlier this month builders Berkeley Group unveiled plans for a 1,800-home ‘King’s Road Park’ scheme in Fulham, and the Battersea Power Station Chief Executive was quoted saying that sales are now “running at £10m a month” . Similar activity is being registered in the commercial sector. Earlier today it was announced that Mayfair Capital completed on its £113m acquisition of the Bonhill Building in Shoreditch from Legal and General.

Notwithstanding the current uncertainty, London is managing to retains its place as a key investment destination and the weakness of the pound is making it more attractive.


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Market performance update

Land registry (UK HPI)
 
June Av. price
 

Monthly change

12 month

England£246,728+0.7%+0.7%
London£466,824+0.7%-2.7%
Kensington and Chelsea£1,254,725-1.2%-4.0%
City of Westminster£965,019-0.8%-0.4%
  • England house prices grew by 0.7% in the year to June 2019, unchanged from May 2019.
  • Across England, all houses showed an increase in average price in June 2019 when compared with the same month in the previous year. 
  • In London, average house prices fell by 2.7% in the year to June 2019, up from a fall of 3.1% in May 2019.
  • The average property price in Islington is now £615,783 representing an annual drop of 6%.
  • In June 2019, the most expensive area to purchase a house was Kensington and Chelsea, where the average cost of a house was £1.25 million. In contrast, the cheapest area to purchase a house was Burnley, where the average cost of a house was £89,000. 
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