The demographics and motivation of buyers in London is shifting, as the capital comes to terms with the upcoming Brexit and property tax changes, according to a report Monday from Black Brick, a London-based real estate agency.
In the first half of 2018, two-thirds of Black Brick’s buyers came from within the U.K., an increase from previous years, when the number was less than 50%, the report said.
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"We are seeing a real shift in the London property market both in terms of buyer nationalities and their reasons for buying a property," said Camilla Dell, managing partner at Black Brick, in the report.
"We believe that the rise in U.K. buyers is due to the British being knowledgeable about what’s happening in the U.K. economically and politically, and able to take a view," Ms. Dell said. "Whilst Brexit and potential political uncertainty are certainly a factor for U.K. buyers, they are more comfortable about proceeding, particularly when there is a real need to move and get on."
All of Black Brick’s transactions so far this year have been for primary homes. In comparison, half of its transactions in 2017 were for primary homes and in 2016, a quarter of purchases were primary homes.
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"The consistent rise in the number of our clients purchasing primary homes in central London indicates that clients are no longer buying for investment, or for discretionary second home reasons," Ms. Dell said.
That’s likely due to England’s property tax—known as stamp duty—which in 2016 introduced an additional 3% tax for those purchasing a second home or a buy-to-let property, according to the report.
Looking forward to the rest of the year, Black Brick expects the number of U.K. buyers to continue to rise. "Those who don’t need to move are choosing to wait until after Brexit, and this is particularly true for international buyers," Ms. Dell said.