The additional homes stamp duty surcharge is contributing to a slowdown in the central London development market according to JLL.
The number of units under construction in central London actually continued to climb during 2015 with a 28 per cent increase in the last year and 10 per cent growth in the second half of 2015 alone.
But “there are signs this is activity is beginning to plateau” says JLL director of residential research, Neil Chegwidden.
“The number of new unit starts in the second half of 2015 was lower than in the first, suggesting developers are beginning to slow their rate of delivery. Furthermore, and perhaps most significantly, the number of units seeking planning permission declined by 27 per cent during the second half of last year compared with H1 2015, suggesting that developers are set to slow future development rates” he says.
“This looks worrying at a time when new housing delivery needs to increase rather than fall” Chegwidden adds, saying this is “clearly” a reaction to political uncertainty, higher taxes and slower sales.
In particular the three per cent stamp duty surcharge for property investors - the core market for many central London new-build schemes - “has further dampened London residential demand” he insists.
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Developers in London are more interested in selling their Land Bank to other developers in London rather than building on it. It is a quick profit for no outlay. Always has been like it, always will.
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