London’s status as a magnet for foreign property investment was burnished in the years after the financial crisis by an investor-friendly tax regime and the falling value of the pound. That may be changing.
Investors from Norway to Singapore are bypassing property funds and putting money into London commercial projects with developers, taking more risk in a bid to increase returns as the U.K. market recovers.
People living outside the U.K. will have to start paying capital gains tax on home sales starting in April 2015 as the government seeks to raise revenue and avert unsustainable increases in London property prices.
Heron International Ltd. will seek 18 million pounds ($30 million) for a penthouse in its residential skyscraper in the City of London financial district, a person with knowledge of the matter said. A sale at that price would be a record for the neighborhood, according to broker Savills Plc.
The U.K. plans to impose capital- gains taxes on home sales by non-residents starting in April 2015 as the government seeks to raise revenue and avert unsustainable increases in London property prices.
Deka Immobilien GmbH, Germany’s biggest manager of property mutual funds, bought an office building in the City of London for about 500 million euros ($680 million) to benefit from rising rents in the U.K.’s biggest financial district.
Fiona Woolf, the second woman to head the City of London in 800 years, said bankers in her district must keep working to regain the public’s trust and backed the Bank of England’s latest move to support lenders.