Despite fears of a “hard Brexit” and Theresa May’s decision to call a snap general election in the UK, property experts predict that house prices for prime central London property will start to recover next year.
At the Middle East Real Estate Forum in Abu Dhabi yesterday, Cluttons said that after a dip of 3.5 per cent in 2016, it expected average house prices in prime central London to fall by another 1.5 per cent this year before starting to level out in 2018.
The property broker said that even in the event of a “hard Brexit” with the UK giving up all access to the single market, it expects cumulative growth for the five years from 2017 to 2022 to stand at about 9 per cent.
“We’re expecting that because we’ve started the clock ticking on the two-year exit process, so hopefully by then we’ll have some clarity on what post-Brexit Britain will look like and we think investors will be more confident and will return to the market in greater numbers,” Faisal Durrani, head of research at Cluttons, told delegates.
“People invest in London because it offers safety and security, it has a proven track record in delivering returns and we do not expect that to change any time soon.”
Sir Edward Lister, a former deputy mayor of London and chairman of the UK government’s Homes & Communities Agency, said that there was demand for between 250,000 and 300,000 homes a year to be built in the UK, while housebuilders were currently building between 95,000 and 170,000 each year.
“The run rate is far lower than the demand rate,” he said. “Hence prices will continue to rise, hence housing will remain one of the most difficult political issues in the UK. That’s why if you looked at the last general election it was the No 1 political issue and, if you cut Brexit out and assume it all goes perfectly, housing will again be the No 1 political issue.”
Last month the Royal Institution of Chartered Surveyors reported that house prices across the UK remained stable in February but continued a year-long fall in London.
Overall, Britain’s housing market has been holding up stronger than expected since last June’s Brexit vote. But in London the high-end market in particular has been under pressure from concerns about Brexit and higher purchase taxes.
lbarnard@thenational.ae
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Manchester United 6 (McTominay 2', 3'; Fernandes 20', 70' pen; Lindelof 37'; James 65')
Leeds United 2 (Cooper 41'; Dallas 73')
Man of the match: Scott McTominay (Manchester United)
Ten tax points to be aware of in 2026
1. Domestic VAT refund amendments: request your refund within five years
If a business does not apply for the refund on time, they lose their credit.
2. E-invoicing in the UAE
Businesses should continue preparing for the implementation of e-invoicing in the UAE, with 2026 a preparation and transition period ahead of phased mandatory adoption.
3. More tax audits
Tax authorities are increasingly using data already available across multiple filings to identify audit risks.
4. More beneficial VAT and excise tax penalty regime
Tax disputes are expected to become more frequent and more structured, with clearer administrative objection and appeal processes. The UAE has adopted a new penalty regime for VAT and excise disputes, which now mirrors the penalty regime for corporate tax.
5. Greater emphasis on statutory audit
There is a greater need for the accuracy of financial statements. The International Financial Reporting Standards standards need to be strictly adhered to and, as a result, the quality of the audits will need to increase.
6. Further transfer pricing enforcement
Transfer pricing enforcement, which refers to the practice of establishing prices for internal transactions between related entities, is expected to broaden in scope. The UAE will shortly open the possibility to negotiate advance pricing agreements, or essentially rulings for transfer pricing purposes.
7. Limited time periods for audits
Recent amendments also introduce a default five-year limitation period for tax audits and assessments, subject to specific statutory exceptions. While the standard audit and assessment period is five years, this may be extended to up to 15 years in cases involving fraud or tax evasion.
8. Pillar 2 implementation
Many multinational groups will begin to feel the practical effect of the Domestic Minimum Top-Up Tax (DMTT), the UAE's implementation of the OECD’s global minimum tax under Pillar 2. While the rules apply for financial years starting on or after January 1, 2025, it is 2026 that marks the transition to an operational phase.
9. Reduced compliance obligations for imported goods and services
Businesses that apply the reverse-charge mechanism for VAT purposes in the UAE may benefit from reduced compliance obligations.
10. Substance and CbC reporting focus
Tax authorities are expected to continue strengthening the enforcement of economic substance and Country-by-Country (CbC) reporting frameworks. In the UAE, these regimes are increasingly being used as risk-assessment tools, providing tax authorities with a comprehensive view of multinational groups’ global footprints and enabling them to assess whether profits are aligned with real economic activity.
Contributed by Thomas Vanhee and Hend Rashwan, Aurifer
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