Thoughts from our Property Experts

2024 Property Predictions in London By YOUhome.

by Adrian Black Adrian Black, author of this post , Friday 29 December 2023


YOUhome Property Experts, London explores our 2024 predictions for the central London property market in this blog.

- ‘Wow for now’ properties will sell well 
- Mainstream properties will maintain values unless supply is stimulated  
- Stamp tax on main residence purchases will be reduced as the government will finally understand that the more we flow the more we grow, but ATED will be increased 

‘Wow for now’ properties will sell well in London

Some types of home will rise in value and some will stay steady or fall.  Modernised ‘lifestyle’ homes targeting the needs of today’s most well-heeled buyers, ‘wow for now’ will continue to do well, but are often not great investments as the needs of the upper echelons change, just as fashions do.  For example, pre-Covid open plan living was the name of the game, post-Covid has seen the rise of working and entertaining from home where more space and more and separate rooms are essential. 
This highly comfortable market segment has resources well in excess of the cost of their property, so the investment aspect is not top of their mind. The ideal ‘now’ lifestyle is, and they are prepared to pay handsomely for it.
The mainstream prime London market will probably stay steady, potentially it may fall in price a little and the main factor influencing price will be supply. Demand will stay fairly consistent.  If supply increases, perhaps if a property / mansion tax is introduced, then we could see properties struggle to hold their value.  Buyers will buy, again for lifestyle but for more mainstream lifestyle needs such as convenience, parks, light and feel-good factors, education, entertainment, closeness to travel and friends, rather than niche high-end fashion in property amenities and the ‘wow for now’.      

Cash is king in the London residential property market
“Even though base rates have probably risen to their near-term peak, the effect of interest rate rises has not fully played out as many fixed rate mortgages have still to reprice. We know there is a lot of cash in London and property purchases are made with high percentages of cash,” notes Adrian Black YOUhome founder, “But that cash has to come from somewhere and it is earning the highest return it has done for around 15 years. That means there is no rush to buy and agreeing to compromise on aspects of properties is more difficult for buyers in this environment.”      

The more life flows, the more life grows
Stamp Duty Land Tax may well be cut for main residence purchases.  The more life flows, the more life grows and every government needs growth. 
“I’m sure the government understands that usage taxes are much more effective than transaction taxes, but it seems it can’t get its head around by how much transaction numbers will rise if taxes were cut and as a consequence how much more tax would be collected in VAT from supporting services. If and when it does, then expect a much more sensible tax policy to follow.  I expect Stamp Duty tax levels to be maintained or even increased for second home / additional purchases.”   
The Annual Tax on Enveloped Dwellings ‘ATED’, for unexempted properties held in companies, will likely be increased.  It’s an easy target for the government to raise more tax and its collection is being facilitated by the introduction of the Register of Overseas Entities where, beginning in August 2022, anonymous foreign owners of UK property are required to reveal their identities.  
And as always, we should expect the unexpected in the London property market in 2024. 

Wishing everyone the best of the season and a happy and healthy 2024.