Non-doms remain, London property prices to rise from 2010 - Spear's Magazine

Non-doms remain, London property prices to rise from 2010

The supposed exodus of non-doms from London has not materialised, according to Knight Frank’s residential market forecast, launched this morning. Their research also predicted that prime London property will grow by three per cent in 2010 and up to nine per cent in the years to 2014, in contrast to a three per cent fall nationally next year, while country houses above £3 million have been most resilient through the downturn.

The supposed exodus of non-doms from London has not materialised, according to Knight Frank‘s residential market forecast, launched this morning. Their research also predicted that prime London property will grow by three per cent in 2010 and up to nine per cent in the years to 2014, in contrast to a three per cent fall nationally next year, while country houses above £3 million have been most resilient through the downturn.

The combination of the £30,000 tax on non-doms and the 50 per cent income rate to be introduced next April has driven away fewer people than have arrived thanks to the weak pound giving discounts of up to 45 per cent and rapid price falls at the end of 2008, the research says. Together with perennially limited supply (down 20 per cent on last year), Knight Frank predicts that London property prices will return to 2007 levels by 2013.

Liam Bailey, head of residential research at Knight Frank, said contrary to expectations, non-doms were remaining in England: ‘There’s a lot of talk but it doesn’t tend to come to fruition. Many foreign buyers are not affected because they are only buying second homes, so their tax status is irrelevant.’ He also remarked on how London was apparently consolidating its position as a global financial capital.

Country houses experienced a 16 per cent fall in 2008 and a 4 per cent fall this year, but will rise from 2011 to 2014 at rates just below those of prime London. The top of the country house market has, however, been largely buoyant thanks to international buyers and the fact that opportunities to buy appealing properties are rare and thus generally taken.

Farmland has been the biggest boomer over the past five years and will continue, according to Andrew Shirley, head of rural property research. He said that farmland would increase by nine per cent next year and by double digits at least until 2014. Because of local factors like limited availability and global factors like climate change and a rapidly-increasing population, farmland could reach £10,000 an acre (double today’s price) by 2015.



 

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