High Value Property Transactions Likely to Fall in 2013

Agents specialising in high value properties are likely to see a reduction in transactions through 2013. Glenntree Estates, who operate in ‘millionaire’s row’, London has reported that turnover is down 50% because of the new tax treatment of rich overseas purchasers buying £2m-plus properties through company vehicles.

The impact on high value transactions is bound to be a negative one since George Osborne’s decision to increase VAT to 15% on such deals.

Last month, Osborne also announced details of the new Annual Residential Property Tax, to be paid by rich buyers using corporate vehicles.

The new ARPT will start at £15,000 for properties worth between £2m and £5m, go to £35,000 for properties between £5m and £10m, and to £70,000 for properties between £10m and £20m. For properties over £20m, the annual tax will be £140,000.

It will be interesting to see if this also has an impact on the prices achieved for properties in this sector. Recent reports show a downward trend of 2-3% in house prices in the last quarter of 2012, however, there is often a seasonal fall at the tail end of the year.

At the other end of the spectrum, first time buyers can benefit from some of the lowest rates offered by the high street banks for 90% loan to value mortgages for some considerable years. Combined with the New Buy Scheme and Funding for Lending scheme which are having a positive impact we may see some activity in this field through 2013. However, it would seem apparent that the high value transactions fuelled by foreign funds is most likely to fall.

To discuss your mortgage requirements, call Harvey Bowes today on 029 2115 6918

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About harveybowes
Mortgage Broker and founding Director of Harvey Bowes Limited. A mortgage broking practice with bases in Cardiff & Poole, UK. We take a fresh and positive approach to mortgage broking which pays dividends for both our clients and frankly, ourselves. The team at Harvey Bowes are expert advisors in all aspects of mortgages from residential to commercial and buy to let.

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