Sales increased by 84% in the £1 million to and £2 million and the most expensive sale in March 2013 was a flat in London’s One Hyde Park for £29 million, the analysis from consultants London Central Portfolio.
It also shows that prices in England and Wales rose by 5%, bringing the average to £234,962. The least expensive sale was a terraced house in Blaenau Gwent for £8,000.
The firm says that the early spring market in prime central London is healthy and has completely recovered from the rise in stamp duty from 4% to 5% for purchases above £1 million announced two years ago.
It points out that the bunching in sales under £1 million caused by stamp duty rises has now burst through and the £1 million to £2 million price band has seen a staggering increase in transactions, up 84% since last March.
Furthermore, the number of transactions in the most susceptible sector of £1 million to £1.5 million is finally back to where it stood in March 2011.
Another potential blow, the increase in stamp duty for purchases above £2 million to 7% for individuals buying in their own name and 15% if buying through a corporate vehicle announced a year ago, also seems to have been absorbed by the market.
As a direct result of these changes, 2012 was a rocky year for properties between £2 million and £5 million but already transactions have made a comeback, witnessing rising by 8% in that last 12 months.
Whilst two years represents the usual time scale for sales activity to recover from tax hikes, London’s safe haven status, coupled with weakening sterling, has prompted investors to return more quickly to the market, the firm believes.
‘As investors have come to terms with the increased cost of moving, we are witnessing increased sales volumes at the top end of the market. Whilst these figures are a result of prime property in central London’s continued global appeal, they also represent a bounce back from the reduction caused by property tax rises,’ said Naomi Heaton, chief executive officer of London Central Portfolio.
‘Transactions in this sector should continue to pick up across the year once the last of the negative sentiment washes through and when tax carve outs, announced in the Autumn Statement, come into force at Royal Assent of the Bill in July,’ she added.
However, an element of both the price and transactional growth is undoubtedly due to a change in dynamics in the super prime market, she pointed out. Some buyers of the most expensive properties are now choosing to avoid Chancellor George Osborne’s new property taxes by purchasing units in their own names rather than in and existing corporate structure.