Following on from my last article here are some interesting market changes brought about due to the recent increases in stamp duty.
1. Uber wealthy are now renting not buying. Even at £20,000 a week they can expect to get 4 to 5 years rent for the equivalent they would have had to pay on stamp duty had they bought. Plus they do not have to worry about maintenance issues.
It just goes to show (yet again) that high taxes do not result in high tax revenues.
2. Renting also gives them complete anonymity as the Government is considering bringing in a register which lists all beneficial owners of properties, even those hiding behind a company or overseas.
3. The wealthy are now preferring to view properties remotely on their smartphones. The agent will live stream a property and - eh voilà - a decision will be reached. No need for relocation agents. This does make sense for highly famous clients who, if they do turn up for a viewing, can expect to pay way above the market rent.
“The properties these people want could be valued at £30m or more,” he said. “The stamp duty on that would be near £5m – that’s the equivalent of five years’ rent even at £20,000 a week. And you save on all the maintenance costs, as they become the owner’s responsibility.