Demand for property in the Earl’s Court area currently comes from a number of sources. Industry already plays an important part reflecting the fact that Earl’s Court provides good transport links to a number of key employment hubs, particularly the West End.

The largest employment industry for people living in Earl’s Court is the Financial and Insurance sector followed by the Professional, Scientific and Tech sector accounting for 20% and 16.4% of the employees respectively, according to the 2011 Census. The dominance of these sectors is not dissimilar to Kensington and Chelsea, indicating Earl’s Court has capacity to draw demand from these higher value markets.

The trigger for this is the fact that Earl’s Court itself is set to become more of a destination. The new redevelopment of the area will include offices and work spaces to support around 10,000 new jobs as well as providing a new high street with independent shops. This is likely to attract more people to both work and live in the area.

International residents are an important source of demand for the prime housing market in London, accounting for around 38% of buyers across prime London. Locally, the French Lycée schools are a particular attraction, and as the redevelopment of Earl’s Court takes place, we expect to see a rise in the number of international buyers looking for property in the area.

Investors

Another important source of demand is from investment buyers. They are particularly attracted to this part of London as there is a mature private rented sector. According to the 2011 Census, 25.1% of households in London are in the private rented sector and in Earl’s Court the proportion is significantly higher at 41.6% of all households.

Demand for rental properties in the area comes from tenants in both the prime and mainstream markets. The prime rental market benefits from a strong employment market and the increasing number of international companies in London. Savills figures show that across prime London, 47% of tenants are renting due to employment relocation and 60% of tenants are from overseas. A revamped Earl’s Court is well placed to pick up on this and attract more affluent tenants.

In the mainstream market, rental demand is being driven by would be first-time buyers who have been priced out of the market and/or are unable to access mortgages as a result of tighter lending criteria.

STAMP DUTY

What do the new stamp duty changes mean?

The substantial reform of stamp duty announced in the 2014 Autumn Statement will mean savings for around three quarters of a million home buyers across England and Wales as all buyers up to £937,500 will benefit. By contrast, around 17,000 transactions above this value will bear an increased stamp duty tax burden.

At the top end of the market, we estimate around one third of total stamp duty revenues will come from property worth more than £2million, less than 0.5% of all transactions. This should put an end to any argument that these properties are under-taxed and further significantly undermines any case for a mansion tax.