The first super prime property deal in London after property tax changes were announced in the budget went ahead moments after Chancellor Rachel Reeves’s speech.
The "soft landing" for the £10 million-plus market meant a purchaser was happy to go ahead with a deal to buy a £10.95 million ($14.5 million) home in Regent’s Park. Ms Reeves introduced an annual £2,000 "mansion tax" for properties above £2 million, rising to £7,500 for properties above £5 million.
However, there are no further stages beyond that, leaving the super-prime market relatively unscathed. Further changes to stamp duty and council tax did not materialise, and no individual wealth tax was introduced.
It meant a UK buyer gave the go ahead for a deal to progress on a 4,185 square-foot five-bedroom Nash-designed house on Chester Terrace in Regent’s Park. The purchase had been under offer for two weeks but was on hold until the budget. Paperwork was fast-tracked and the exchange happened later the same day.
Luxury estate agent Beauchamp Estates said it was the first super-prime residential sale exchange following the Chancellor’s speech, and could have been derailed if last week’s budget had resulted in onerous real estate taxes being introduced. Beauchamp said the buyer was moving from the Home Counties, just outside London, because of the “once in a generation” opportunity to move into a family house in the heart of the capital.
The Nash house is located on the neoclassical Chester Terrace in Regent’s Park, originally designed by John Nash and built by James Burton in 1825. The Grade I-listed house overlooks Regent’s Park and has two grand reception rooms, passenger lift to all floors, cinema room and private roof terrace.
During the Edwardian era it was the London residence of the wealthy Irish landowner and politician AG McKenzie, who was a member of the Ulster Unionist Party and campaigned for Northern Ireland to be part of the United Kingdom.
Parliamentary records show that during the Home Rule Crisis of 1912 to 1913 the house served as a base for meetings about the future of Ireland between Mr McKenzie, UUP leader Sir Edward Carson, Conservative Party heavyweight Arthur Balfour and the Liberal Party Prime Minister Herbert Asquith.
Jeremy Gee, managing director of Beauchamp Estates, said: “The "soft landing" for the London property market following the budget triggered this deal, the first super-prime sale in central London following the Chancellor’s speech. The sale underscores the key trend in prime central London’s super-prime market that high quality, turnkey homes continue to attract international buyers.”
The budget, in which £26 billion of tax rises were announced, led to accusations that Ms Reeves misled voters by talking up the scale of the fiscal challenge, accusations she denied on Monday.
Many in the property sector breathed a sigh of relief that there were relatively few changes.
Will Watson, head of The Buying Solution, said he received messages from clients straight away. He told The National the first was one of relief – “good news, let’s get going’ – and a second said “let’s make that £20 million deal happen now”.
In a similar vein, Trevor Abrahmsohn, managing director of Glentree International, said the market could expect an “avalanche of contracts exchanged before Christmas, which is no bad thing for liquidity in the marketplace and estate agents’ coffers”.
Meanwhile, Daniel Daggers, founder of luxury property dealer DDRE Global, said the mansion tax charge was not a “market-stopping number, especially not in the super-prime sector, where the costs are marginal to overall holding costs”. He said it would accelerate a trend already emerging, “with empty-nesters questioning whether it still makes sense to hold large homes long term”.
Matthew Robertson, co-founder and chief financial officer of Valouran, predicted a rapid increase in transaction activity because several other rumoured property tax hikes “have not come to pass”.
Alex Carr, head of prime central London residential at JLL, said: “The capital’s prime market continues to attract international buyers, particularly from the US, and budgets for new homes rising by around 19 per cent over the past five years show how resilient confidence in the city remains.
"While the decision to introduce a mansion tax on properties over £2 million is disappointing news for the prime market, it is unlikely to affect demand for prime central London. Buyers at this level are driven by long-term lifestyle and investment fundamentals rather than adjustments of this scale.”
