The property market is currently abuzz with discussions about the forthcoming general election and its influence on market dynamics. Contrary to expectations of a slowdown, we saw an increase in transactions since the beginning of the year, especially in the £5-10 million price range. A significant number of these buyers are international clients, often parents investing in a second home for their children who are studying in the UK, highlighting the global reputation of our educational system. As we approach the election it remains to be seen what affect this will have on transaction levels, although it is hoped that once the election has taken place this will bring some much needed certainty to the market.
Despite the likelihood of a Labour government, which is expected to raise the Stamp Duty Land Tax surcharge for non-UK residents from 2% to 3%, the existing surcharge has not significantly deterred high-value property investment from abroad to date. The potential impact of the proposed abolition of non-domiciled status is yet to be determined. However, it might be anticipated that clients who have established strong ties in the country, perhaps due to their children's education, would prefer to avoid the disruption. The Labour Party's manifesto mentioned the introduction of a "modern scheme for people genuinely in the country for a short period". While the specifics of this scheme remain unclear, if it resembles the earlier proposal that allows foreign income and gains to be brought into the UK tax-free for the initial four years of residency, it could offer a financial incentive for overseas clients contemplating a short-term stay, such as during the period their children attend university.
The Leasehold and Freehold Reform Act has also introduced significant changes to leasehold properties, as discussed by Alison Taylor, Of Counsel. While some major reforms have been implemented, other issues remain unaddressed, with expectations that the incoming government will tackle these post-election. Labour have issued a strong manifesto statement that they pledge will finally "bring the feudal leasehold system to an end"; banning new leasehold flats and ensuring that commonhold is the default form of tenure.
Also included in this publication, Partner Andrew Williamson offers a comprehensive step-by-step guide to the process of selling a property after the death of a loved one, assisting with what can be an emotionally taxing and complex issue.
Finally, prospective homeowners often plan to make alterations to their new property, and it's likely that previous owners have made changes as well. It's crucial to secure Planning Permission and Building Regulations Consent for such works, but these are often overlooked, leading to potential enforcement action and delays in property sales. Carly Clayton, Associate, provides an update on recent extensions to the enforcement periods and shares advice on ensuring a smooth sale process by having the necessary documentation in place.