We’ve just returned from the latest of our quarterly visits to the Far East. We spent three days meeting clients in Dubai before moving on to Hong Kong where we conducted a series of seminars, highlighting the latest developments affecting the London property market.
In the many years we have been hosting these property seminars, these events were by far, the busiest we have ever seen. The Breakfast briefing at the British Chamber of Commerce in Hong Kong was oversubscribed and our own weekend events were completely full with not one person failing to attend. It seems London property investment has lost none of its appeal for Far East investors.
The subject of our presentation was ‘Is it time to panic – should you buy, hold or sell your London investment property? Afterwards, investors took part in a question and answer session which was a good opportunity to discuss their concerns, what they think about the new Capital Gains Tax (CGT) and how the looming General Election could affect property investment.
What do investors think?
Our opinion is that changes such as the introduction of CGT for overseas investors are simply making the UK tax system fairer. Investors agreed, admitting that although there may have been a slight panic initially, they were actually surprised it has taken so long for this anomaly to be rectified. Many other countries in the Far East have ‘anti-investor’ policies so, despite this ‘correction’, the UK remains a good place to invest with enthusiasm for investing in London property as strong as ever. One investor commented: “We should be concentrating on the profit we have made and the growth we have achieved and will achieve in the future. CGT won’t affect my decision to invest in London.”
British expats too, have no issue with CGT. No one that we spoke to has plans to sell their London property. The belief is that, although CGT will make it slightly less profitable to sell London property, the net effect will not be too damaging. Clearly, investors are in no mood to panic.
One precaution most investors are taking is to arrange a desktop valuation of their properties to ‘lock-in’ the value at April 6th 2015 to enable future CGT to be accurately calculated. For more information about how we can help with this, call Monika Semanova on +44 (0)20 7319 9730 or email us.
How will the proposed Mansion Tax affect the property market?
This hot topic was greeted with a similarly philosophical response. As most investors purchase a buy-to-let London property valued below £2m, the threshold at which Mansion Tax will kick in, it does not affect their decision.
Neither have recent changes to Stamp Duty affected the market. Investors buying a property valued below £937,500 are finding Stamp Duty has actually fallen. So, rather than killing demand, these new taxes are re-directing it – away from the top end of the market and towards higher yielding, lower-value properties.
Property remains fundamental to the UK economy
Overseas investors are in agreement with us, that while it is expensive to buy a London property, high rental demand looks set to to continue and the property market will remain a fundamental part of the UK economy.
Our next Property Investment seminars will be held in Singapore on Saturday 11th April and Malaysia on Saturday 18th April and there is also an opportunity for private appointments. To book your place or get more information click here or email us.
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