London’s becoming a renter’s town

Rental agreements jump 23% as would-be buyers drop out

Georgian houses in London
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.

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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