London’s super-prime market holds its allure - Boodle Hatfield

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21 Jun 2024

London’s super-prime market holds its allure

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Interest continues into the world of London’s super-prime market fuelled by television programmes focusing not only on London, but also other super-prime markets globally.

With a looming election there is much speculation as to what could happen with a Labour government. On a global level we see economic volatility, political change in many countries with their own elections looming and geopolitical issues, but ultimately global wealth continues apace. London continues to remain a focal point for many investors attracted by the relative security and educational offering, both for school aged children and at university level. The pound has remained relatively weak against the dollar and the euro keeping the UK as an attractive investment opportunity. Many also still value the lifestyle offered by what remains one of the great dynamic cities of the world favoured by the global elite.

Whilst many buyers of super prime properties are cash buyers, mortgages are now frequently taken to allow money to work more efficiently. With borrowing rates predicted to start to decrease, this is also an attractive prospect even within the super prime arena.

There remains strong competition for the best in class properties in London with deals being agreed off market and covered by strict confidentiality to ensure that transactions happen quickly and in secrecy. For this reason, it’s important for anyone investing into the super prime London market to be prepared. Make sure that you have your professional team ready, solicitors instructed and tax advice obtained, appropriate agents engaged to act, with surveyors ready to undertake surveys quickly. Funding arrangements should be agreed in principle where this is part of a purchase.

On the legal side consideration is always needed on who should purchase the property, so that proper thought can be given to the Stamp Duty Tax payable and other future taxes including inheritance tax, capital gains tax, income tax and possibly the annual tax on enveloped dwellings. Where properties are bought in corporate names companies needs to be incorporated, and if these are non-UK companies, they must also be registered on the Register of Overseas Entities.

The changes to the non-domiciled tax status will be especially important for investors to be properly advised upon. It’s not clear yet with a new government what further changes may be brought in and what effect this may ultimately have on the super prime market. At present, deals continue and there is pressure in the key areas to find properties. Some agents are reporting that buyers are pausing and waiting for the outcome of the election in July, but large deals and competition remains in areas such as Notting Hill, Mayfair, Knightsbridge, Kensington and Belgravia.

Whilst some UHNW individuals will look to other favourable tax regimes in other jurisdictions including for instance Italy, there are others who want to live in the UK, or to own property here. Whilst some will arrange their affairs to find a more favourable tax regime, the market continues to show that UHNW and HNW individuals want to live, or own properties in the UK where they enjoy the benefits of London and what the UK offers.

This article first appeared in PrimeResi in June 2024. 

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