Despite concerns that announcements made by chancellor George Osborne in his Budget speech last week (March 21st) will deter high net worth individuals (HNWIs) from investing in prime London property, one real estate expert does not believe the tax changes will have a significant impact. Editor at BuyAssociation Paul Collins commented: "The property market, particularly at that end of the market, is very strong and is not showing any signs of slowing down at the moment." He added those with the means to purchase prime property in London will discover it is "quite a decent investment at the moment".
Knight Frank recently published a report which revealed HNWIs consider London, New York, Paris and Hong Kong to be the most important locations in the world. The organisation noted real estate assets comprised 19 per cent of the portfolios held by the planet's wealthiest people in 2011, with those surveyed stating lifestyle and investment potential were the most important factors when making a property purchase. Editor of The Wealth Report Andrew Shirley pointed out the strong performance of prime real estate markets around the globe is an indication of how well the richest individuals are "weathering the economic slowdown". He stated: "Those markets considered safe-haven locations continue to attract private investors looking for both prime residential and commercial property. Political and economic uncertainty across the world is only helping to exacerbate the trend."
Charles Douglas, a London-based property lawyer who specialises in dealing with transactions for HNWIs, commented in the report that "the angst in the wealth and property industry over higher tax rates and new levies on property has been almost entirely misplaced". He explained tax only plays a small part in the decision-making process when it comes to real estate investment at the top end of the market, adding "what they (HNWIs) really value is the lifestyle that comes with an open, cosmopolitan environment, excellent education for their children and both personal and property security".