2020 has been a mixed year for the London property market. From the Boris Bounce at the start of the year to the inevitable slowdown as a result of the COVID lockdown it was been an experience of extremes. However, despite these changing conditions, thanks to the influence of technology and the robustness of the market in general some activity has always remained. Property valuation in London now starting to pick up significantly once again and there is now a general perception that this is the right time to invest in London property once again.
Stamp Duty is a tax paid by the buyer on the purchase of a property. It can add significantly to buyer costs but a recent move by the government has seen this suspended for purchases made between 8th July 2020 and 31st March 2021. The Stamp Duty break means that there is no tax for buyers to pay on properties worth up to £500,000 – rates apply above this threshold, including 5% that will be due on the proportion of a purchase price between £500,000 and £925,000. For those purchasing an additional property the 3% surcharge still applies so, for example, Stamp Duty will be 3% on properties worth up to £500,000. Stamp Duty can be a considerable expense for buyers and so this break makes it a great time to invest.
When the restrictions of COVID first hit, the property market was challenged in many ways. However, we have now reached a point where many of these obstacles have been overcome. Building sites are now safely reopening, for example, developments being finished and safe systems and processes have been put in place to enable viewings to be carried out and offers made. Technology is facilitating a big part of this, for example by enabling virtual viewings that can be contact free.
Those looking to invest in property are likely to find some impressive deals in 2020 as a result of the drop in the property valuation forecast for this year. The Centre for Economic Business Research recently announced that house prices in the UK will fall by 13% by the end of 2020, which will create many opportunities for investors to find properties that might have previously cost a lot more. The long term forecast is brighter – market insiders still predict a 15% rise in house prices by 2024, indicating that this current slump won’t last and properties purchased now are likely to go up in value.
Even with the impact of COVID the property market remains a solid opportunity for investment with far less volatility involved than something like the stock market. As well as a physical asset, investing in property can also deliver diversified income – from rents or sale – and the demand for property in London is predicted to remain high.
From the reduction in purchasing costs to the greater ease that the process now enjoys these are just some of the reasons why now is the right time to invest in London property.
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