Last 3 months vs the same period last year:
- New Buyers -9%
- Viewings +25%
- Offers +80%
The status of the UK and London on the global stage is under review. A change in government leads to a change in policy and taxation. Being discussed in meeting rooms and over dinner parties across the country are the expected rises in CGT and the removal of non-dom tax status—especially among estate agents in London and within property circles.
The removal of non dom status is a point of considerable interest to the PCL property market. According to HM Revenue & Customs, ~74,000 people claimed non dom status in 2022-2023. In March this year, Jeremy Hunt announced that non dom status will be phased out and at a future date, UK tax will be charged on offshore earnings. Inheritance tax will also be sought by the UK Government on assets worldwide, for those who own a property here. Labour have said they will look to strengthen these reforms, although we await the finer detail. High net worth individuals are considering – do they want to own a property here, if it potentially means paying IHT on their Estate worldwide?
Money is clearly on the move. This is driven at one level by the financial planning of the world’s wealthy, but also there is a lifestyle choice at play. Henley & Partners’ recent research projected that the UK would see more millionaires migrate than every other country, bar China. With the greatest gains being made by the lower tax jurisdictions such as the UAE and Singapore – the push/pull factors of a global tax system.
However… At the “coalface” of London property, emotion and lifestyle are still firmly at play. We don’t all live life on a spreadsheet, and London, as well as the wider UK, remains an attractive place to live or own a property for so many reasons beyond financial considerations. Looking at our internal figures, Maskells has had a remarkable run of success in the last 3 months. Our viewing numbers are up +25%, and our offer numbers are up by 80% YOY. We have sold some remarkable properties, including the largest house to sell on the open market in SW1 so far this year. Notably, there’s been a strong increase in the number of US-based buyers we are seeing transact. Around 30% of the properties we have sold in the last 3 months have been to American buyers, reinforcing our position as trusted international estate agents. I would happily take Starmer over Trump!
So while there are some who cry the house is on fire, the UK has always had an oversized population of millionaires. An increase in taxation will see a net migration of wealth. However, London remains one of the most sought after cities on earth for its rich history blended with an extremely forward thinking and welcoming culture. There are many who are considering the removal of non dom tax status, and speaking rather morbidly, whether they can afford to die here. Many will strongly object to the current tax plans, yet needs must… I was recently showing an international buyer around a wonderful house we are selling for £8,000,000. The topic of conversation turned to the changing economic landscape. This discerning buyer displayed much criticism towards the increasing tax burden and how one should not purchase a property. I offered to end the viewing, yet… we have agreed terms very close to the asking price. Regardless of our tax policy, his children are still starting at one of our historic boarding schools…