Property prices showing a major improvement on this time last year

Earlier this year the government introduced a higher tax on properties that have been purchased for over £2 million. This is largely targeted towards luxury properties in the centre of London and it has meant that in May property prices rose for the smallest amount in the past nine months.

However, the value of properties is still increasing and when you look at the same figures from last year it is a really remarkable increase. Properties that cost over £3.5 million saw an increase of around 10 percent on their value from the previous year. These figures were issued by a property broker based in the city.

The tax was raised by the chancellor, George Osborne, and it is what people commonly referred to as stamp duty. In March the stamp duty on a home of this cost was around five percent, however he decided to raise it to 7 percent. While you might think that this only applies to the most expensive houses in the city, it is actually the average value of properties in one of London’s most affluent areas, Kensington and Chelsea.

One of the reasons why house prices in London have been increasing so rapidly is because of the debt crisis that is occurring in Europe. Overseas investors are looking for ways to protect their wealth and property in the capital of the UK is seen as a good way to do this. Since the markets peak in 2008 the price of property has increased by around 12 percent.

It is estimated that around 60 percent of all house purchases in the capital city by foreigners. Most of these purchases take place in some of the most expensive districts and it is estimated that half of Kensington and Chelsea’s residents are from outside the UK