Storm Clouds on the Horizon?
“The horizon of many people is a circle with a radius of zero. They call this their point of view.”
So said Albert Einstein and so it can possibly also be said of some recent proposals from central and local government which will impact the residential property market for Mayfair.
This Tuesday, 11th December, the government published their draft Finance Bill clarifying the SDLT (stamp duty land tax) hike and the introduction of ARPT (annual residential property tax) for company envelopes owning property.
The draft bill also has vast implications for “non-natural” persons, CGT (capital gains tax) and IHT (inheritance tax).
The British Property Federation seems to have “done their bit” in making the government clarify that developers will not be liable to the 15% SDLT and that any CGT charges will NOT be based on an historical price base.
The newspapers have stirred up a hornets nest on the avoidance of stamp duty by foreigners however our sales data shows that 97% of our £2m+ transactions paid stamp duty.
70% of Mayfair sales in 2012 were to overseas purchasers. Wetherell’s view is that professional advice should now be taken from lawyers, accountants and property advisors as to the way forward although the bill will not be consented until July 2013 – as they say – the devil will be in the detail.
If you are buying in your own name or Trust then it is business as usual at 7% SDLT.
Every week now sees a press article on the revival of Mayfair as a prime residential area and extoling its charms.
Westminster Council (WCC) is now challenging the government policy of more conversion of commercial buildings to residential to stimulate economic growth.
The deputy council leader Robert Davis is conducting consultation to be published in the spring of 2013 aimed at curbing the growth of residential to maintain the “equilibrium” between commercial and residential property in Westminster.
It would be a shame if Mayfair’s renewed “gentrification” was curtailed over a Westminster wide policy as buyers seek to buy and restore period buildings back to their original residential use.
The beginning of the commercialisation of residential Mayfair started after WW1 in the 1920’s and 30’s when the empty mansions were either pulled down and replaced by hotels and mansion flats or converted to other commercial uses.
This commercialisation of the area accelerated after WW2 when commerce took over the remaining buildings on “temporary office permits”, some of which expired in the 1970’s and the majority in 1990.
H2SO reported in February this year that 3.1m sq.ft. of commercial to residential has been undertaken in Westminster between 2001 and 2010 with an outstanding 2m sq.ft. of planning consents from office to other uses which have not as yet been implemented.
There is also the opportunity of creating more smaller flats in the area by demolishing or converting tired or ugly 1960 and 1970 office buildings over to residential use.
Mayfair now has world class retail, office, hotel and cultural facilities; an infrastructure that residential buyers find highly attractive.
We look forward to residential re-appearing in locations such as Albemarle Street, Dover Street, Clarges Street and Bolton Street. These are some of Mayfair’s oldest residential addresses.
On behalf of the Directors and Staff of Wetherell, I would like to take this opportunity of wishing all of our clients, friends and Mayfair Aficionados a very Merry Christmas and look forward to what will be an eventful New Year.