The attraction of the London property market to overseas buyers is legendary, but a lot can happen between one year and the next. Are we at the beginning of the end for London's special place in the eyes of the wealthy elite of Russia, China, the Middle East and Asia? Are the recent tax changes beginning to dim London's lustre?
The changes to SDLT and CGT heralded by the Autumn Statement could be said to represent the culmination of progressive attempts by the government to tap in to the wealth of overseas investors, and to chip away at the comparative freedom from property taxes they have enjoyed.
Our experience is that the tax changes in themselves are not sufficient to deter overseas buyers from continuing to invest their wealth in London. The factors which have long attracted people to London are still present, whether their priority is to "bank" their money in property which in the long term continues to rise in value, to partake in the lifestyle offered by London, to educate their children in the British system, or to live and work somewhere which is still comparatively safe in global terms.
Additionally, the new property taxes are still lower than these buyers would find themselves paying in, say, Dubai, New York or Singapore.
Overall therefore, one could say that it still seems to be business as usual. On the other hand, if we look more closely at the nationality of new buyers, we may find that some change is on the way.
For instance, we anticipate that the falling rouble combined with continuing sanctions will mean that fewer Russian buyers will be evident in 2015. The recent introduction of internal tax changes in Russia to bring property purchases overseas into the Russian tax net will also deter many buyers.
Chinese buyers in contrast are likely to increase in numbers as the wealthy middle classes look for assets outside China to acquire with their growing wealth, and London (together with Auckland and Sydney) remains attractive to buyers from China.
Notwithstanding the huge fall in oil prices, we believe that Middle Eastern buyers will remain attracted to London and may have more incentive than before to invest.
In conclusion, our experience to date is that the cumulative effect of recent tax changes has not served to kill the golden goose. For the future, it remains to be seen whether the worsening political situation across the globe, the Eurozone worries, or the UK election in May will dent investor confidence.
