Investec: Tax Increases Will Have Little Impact on High End Property Market

Research by Investec reveals that most property & mortgage professionals do not expect tax increases to impact significantly on the property market. End Quote

(1888PressRelease) January 27, 2011 - From April 6 2011, those buying properties worth £1 million or more will see the amount they pay in stamp duty rise from 4% to 5%, but research1 from Investec Specialist Private Bank ('Investec') amongst estate agents, property developers and mortgage brokers specialising in this market reveals that 52% expect this to have no impact on prices. Some 45% expect prices to fall slightly as a result of this, but none of those interviewed believe there will be a sharp fall as a result of this rise in stamp duty.

Similarly, 55% of these property specialists interviewed believe that the decision to raise Capital Gains Tax from 18% to 28% last year for higher rate taxpayers has had no impact on prices in the high end property market. However, some 41% think they have fallen slightly as a result of this, and only 3% think that this change has resulted in a significant fall in prices.

Jack Jones of Investec Specialist Private Bank said, "The high-end property market appears to be quite robust to adverse changes in tax. This is probably because the market is still seen as being very attractive, with opportunities for both British and non UK buyers. The sector is very different to any other residential property market, and this is demonstrated in its recent strong show of resilience. Sales are still strong and demand for million pound plus properties although down, remains high."

Indeed, Investec's research reveals that only 41% of estate agents, property developers and brokers specialising in the million pound property market are less optimistic now about it than they were before the credit crunch. One in three (34%) are actually now more optimistic. This helps explain why one in four (75%) don't believe that a 'bubble' is developing in the million pound plus residential property market.

Investec recently launched a £Million Plus mortgage targeted at high net worth professionals who do not get paid along conventional lines, but rather accrue irregular income such as lump sum bonuses. The new custom-made mortgage offering takes overall income and wealth into account rather than just the value of an individual's property and their regular monthly income.

The £Million Plus mortgage is aimed at the top end of the market, with loans available exclusively to individuals looking to borrow a minimum of £1 million2 with sustainable earnings in excess of £300,000 a year and an established balance sheet in excess of £3 million. It says that these individuals typically purchase properties worth in excess of £1.5 million.

The mortgages may be secured against a variety of assets including property, shares, investment holdings and offshore deposits, and are available in a number of currencies. The offering is not limited to UK nationals and includes the purchase and refinance of UK property residence and investment properties.

For further information on Investec Specialist Private Bank mortgages, call Jack Jones on 0207 597 4601.

Your home may be repossessed if you do not keep up repayments on your mortgage

For further information please contact:
Investec Private Bank
Jack Jones
Sarah Bradbury 020 7597 4789

Citigate Dewe Rogerson
Phil Anderson 020 7282 1031
Alistair Kellie 020 7282 2850
Katie Pugh 020 7282 2914

Notes to editors:
1.Interviews conducted over the phone with 35 estate agents, mortgage brokers and developers who focus on the £1 million plus property market by CDR Research between 18th and 29th October 2010
2.If a couple, the primary applicant must be earning £300,000 per annum or more

Specialised Banking is a division of Investec Specialist Private Bank. Our Specialised Banking team provides high value custom-built mortgages exclusively to individuals with sustainable earnings in excess of £300,000 a year. Mortgages in excess of £1million can be secured on prime properties in the UK and Europe. Finance is available for purchases, refinance, or raising capital for other investments. Available in a range of currencies, loans can also be secured against a number of assets including property, investment portfolios and offshore deposits. The division's offering is characterised by personal service and innovative facilities tailored to each client's distinctive requirements.

Investec Specialist Private Bank has developed a real affinity with the entrepreneurial class and our experience places us right at the heart of this unique business community. We have created an environment that helps make things happen: propelled by a successful track record and market-leading expertise.
Our areas of specialisation include Structured Property Finance, Banking Services, Specialised Lending, Wealth Management, Trust and Fiduciary services, and Growth & Acquisition Finance.
Investec Specialist Private Bank is a division of Investec Bank plc (Reg. No. 489604) of 2 Gresham Street, London, EC2V 7QP. Authorised and regulated by the Financial Services Authority. A member of the London Stock Exchange.

This press release is issued on behalf of Investec Bank plc. Registered address: 2 Gresham Street, London, EC2V 7QP (Reg No. 489604)

Visit http://www.investecspb.co.uk/ for more.

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