Let us examine BUY: The Government have got this wrong in my opinion. The additional stamp duty levy of 3% on investment properties has been devised to raise more money for the Treasury and to attempt to slow down recent price rises in London. The ultimate aim is to assist people on to the property ladder as opposed to limiting them to being perpetual rent payers. Whilst it will raise money for the treasury I fail to see how it will effectively help first time buyers and cannot find any plausible reason for the policy.
Now on to SELL: The £3m to £15m mark is without question the segment of the market that has had the least traction over the past 2 years now and there still seems to be a lack of compounding interest in this department. My own analysis is that buyers at this level, in the main, are the highest leveraged in percentage terms when compared to buyers at the sub £3m mark and buyers at the £15m+ mark. As an example, a £10m purchase will give you an SDLT bill of over £1.1m or 11.15% that is un-financeable at the outset of the transaction.
I’m going to HOLD: Not necessarily a bad move, but one that only defers an outcome as one will generally never catch the peak or the trough. If you wish to buy something, the perfect time to buy is when you find the right property. So if fits your criteria, negotiate a workable price for both parties, secure, sign and move forward. If you’re a seller, price the property correctly to sell and you will find your desired result soon enough.
Finally, to EXIT or shall I say BREXIT. Whilst I cannot see the UK exiting Europe, at a published rate of £55m worth of daily contributions to the EU and no real quantifiable accountability of the financial benefits that seep back down to us, the whole membership is also very questionable. Nevertheless, what overseas dollar based earners now ought to be doing is capitalising on the effects of the weak pound which pundits predict to range between 1.35 to 1.40 for the next few months having dropped from 1.50 in December 2015. Assuming in December you were contemplating buying that property at £10m ($15m) and swallowing the £1.1m stamp duty bill, today converting at 1.40 you would acquire it for the equivalent of $14m having saved over $1m or around £700k towards your stamp duty bill.
I would like to leave you with a final thought which was infamously quoted by Winston Churchill:
A pessimist sees the difficulty in every opportunity; an optimist sees the opportunity in every difficulty.