Britain is a nation obsessed with house prices, and with housing prices rising over 11% in London it’s easy to see why. The average house price in London is due to reach £600,000 by 2018, which means that the average homeowner would incur a 4% stamp duty rate just to buy a home.
Think Tank Civitas has suggested that curbs should be put on overseas nationals who buy property in London, and largely leave it vacant. They believe that this is a huge factor in house price inflation in the area, and why London prices increase at over twice the rate of the rest of the country.
Australia has already implemented a similar system, whereby non-residents are not allowed to buy an existing house but they may be allowed to buy a new house that hasn’t been occupied. This ensures that housing stock increases without artificially inflating prices or making it more difficult for residents to find a home.
Higher-value properties are particularly hit by this trend, with £350m worth of mansions sitting empty in London’s Bishop’s Avenue since they where only purchased as part-time dwellings. However, since the homes are consistently bought the house values on this street have more than doubled in 10 years – this makes it an incredibly attractive investment even if nobody ever lives within the property. Likewise, in 2012 only 3 of the 85 apartments at controversial One Hyde Park were occupied full-time.
While people trying to find a way to enter the property ladder will find it difficult to do so, particularly with the average house price exceeding stamp duty thresholds, existing home owners can improve their existing homes to either sell at a higher price and expand further, or simply add more room onto their home so that they do not need to go through the upheaval of moving. Loft conversions have been shown to add the biggest boost to property prices, and can add up to £20,000 on to the value of a home.
Tags: average house price, housing market
Categorised in: Housing Market