The Real Deal New York

London’s becoming a renter’s town

Rental agreements jump 23% as would-be buyers drop out
December 26, 2016 11:00AM

Georgian houses in London

With high real estate taxes and the uncertainty surrounding Brexit causing home price to tumble, London is becoming a renter’s town.

As buyers take a “wait and see” approach, rental agreements jumped 23 percent during the three months between September and November compared to a year earlier, according to Knight Frank.

For expats living in London, the U.K.’s stamp tax on transactions is also an issue, the Wall Street Journal reported. Since 2014, taxes on homes valued at more than $1.15 million went up on a sliding scale. And in April, another 3 percent was tacked onto the sale price for foreign buyers. Brokers say some clients are choosing to rent instead.

According to Knight Frank, home prices in central London dropped 6 percent on average in 2016. This spring, investment fund Lennox Investment Management was going to sell two houses and two condos for $74 million combined, but opted to rent out the properties instead. [WSJ] — E.B. Solomont