博鱼体育集团

Chancellor Rachel Reeves about the need to remove the barriers to economic growth.

But adjusting the height of a barrier is futile when there is no incentive to jump over it.

You can 鈥渇ix the planning system鈥� but housebuilders won鈥檛 build unless there is sufficient demand. Rising mortgage costs since October鈥檚 Budget have made the government鈥檚 aim of building 1.5 million homes during this Parliament even more challenging.

The wrong end of the telescope is also being looked down in relation to foreign investors.

The government plans to amend the so-called (TRF), which is one element of its new residence-based scheme for non doms. Under the TRF, investors have a three-year window to bring overseas funds into the UK at low rates of tax.

Widening the TRF window would be a welcome move, but only if investors feel tempted to go through it. The red line for 83% of is making overseas trusts subject to UK inheritance tax and that remains the key stumbling block.

In fact, choosing to focus on the TRF makes you wonder why the government has concerns about a scheme that doesn鈥檛 start until April.

Until the inheritance tax issue is addressed, expect about foreign investors leaving the UK for places like Italy, Switzerland and the Middle East.

The non dom proposals are part of the Finance Bill, which is currently going through Parliament. Amendments may still be tabled by the government or opposition parties and the final legislation will take shape in coming weeks. As well as the issue of inheritance tax, an Italian-style flat tax may also be discussed.

As a result of this political uncertainty and rising borrowing costs since the Budget, demand in the prime London property market is subdued.

The number of new prospective buyers registering in London was 8% below the five-year average in the second half of 2024, 博鱼体育集团 Frank data shows. The number of offers made was down 11% over the same period.

January brought financial market volatility over and questions around the , which means it has been a good moment for .

Fifteen years ago, this volatility would also have boosted investment in prime central London (PCL), which became a safe haven after the global financial crisis.

Average prices in PCL are down by 18% since the last peak in August 2015, which means there is a strong relative value argument for buyers. The annual change was -0.8% in January, which is an improvement on a figure of -2.3% recorded 12 months ago, largely thanks to the more favourable rate environment that materialised in the middle of last year.

Rates have risen since the Budget due to government plans to borrow and spend more, although the equity sell-off last week provided a minor respite as demand for bonds rose and yields came down slightly. Markets even priced in three Bank of England rate cuts in 2025 during the stock market turmoil of last Monday, although those expectations cooled slightly over the rest of the week.

Meanwhile, activity remains relatively stronger in prime outer London (POL). The number of exchanges in POL was 10% higher than the five-year average in the second-half of 2024, which compares to a 3% increase in PCL.

Average prices rose 1.4% in the year to January, up from a decline of 1.5% 12 months ago in a market where demand is fuelled to a greater extent by buyers who need to move for reasons including schooling and employment.

Overall, price growth has been largely flat for four years in PCL and for two years in POL. However, as financial markets showed us last week, demand can rise quickly when there is an incentive.