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Two key events influenced the London housing market in 2016: the increase in stamp duty for owners of multiple properties and the referendum on the UK's membership of the European Union.

When one thinks of owners of multiple homes, the first thought is often that of large-scale multi-millionaire landlords, many of whom will have been relatively unaffected by the stamp duty land tax increase. Before April 2016, the same level of stamp duty is payable on the purchase of your principal home as on your tenth buy-to-let property. Since then, however, when buying any property that means you own more than one, an extra 3% stamp duty is charged. It is not just professional landlords who own various properties; in fact the luxury of multiple homeownership is enjoyed by many, just on a more modest scale. First time landlords in their fifties are looking to invest inheritance money in a buy-to-let property and couples in their thirties may be able to take advantage of mortgage offers to hold onto their first flat when they move on to a larger family home. It is these people, often referred to as 'accidental landlords' who find themselves in a previously unexpected position to own a property that they rent out, who are often more affected by the stamp duty increase. With mortgage repayments to make, these small-time landlords may find their profit margins squeezed a little in the short term, however their long term financial goals can still be met by the long term capital growth of their property investment.

So what impact has the increase in stamp duty, normally a hot topic in the sales market, had on the lettings market? Following the announcement in November 2015's budget that owners of multiple homes would pay more stamp duty from April 2016, those who had been considering the purchase of an additional property were galvanised into action to take advantage of the lower rate while it lasted. The buyers who registered with estate agents in spring 2016 included more investors than usual, and as a result a higher proportion of properties were sold to then be placed on the rental market. As one might imagine, the influx of rental properties to the market gave prospective tenants in some local markets with fantastic choice, which in turn has led to some long term tenancies being agreed for properties which perfectly suited tenants' criteria. In areas with many new build properties, which are favourites among rental investors, lettings prices fell slightly due to a short-term supply and demand imbalance.

With regard to sales prices in the capital, central London homes increased in value by an average of just 0.1% in 2016 whilst in outer London, growth was much stronger at 4.9%. Hammersmith and Fulham, a relatively central borough, has seen sale prices decrease by 11.6% between January 2016 and January 2017. That said, in the last month we have seen an increase in the number of new instructions in Hammersmith and Fulham, and given the relatively short supply of homes coming to the market, owners can take advantage of the high demand from buyers by setting confident asking prices. In prime central London, homeowners are choosing not to market their property for sale until they are more certain about the impact of the imminent Brexit plans. Furthermore, given the high stamp duty tax payable on each move, some families have chosen to improve their current home to suit their lifestyles rather than simply find somewhere else, with a view to reducing how often they will need to move house over the coming years. When homeowners do successfully sell their central London homes, they look to move to London's suburbs, such as Brentford, Isleworth, Chiswick and Ealing, where they can get better value for their money and, perhaps, better security in their investment.

Political and economic uncertainty, coupled with increased taxes, has the potential to dampen homebuyers' enthusiasm to purchase property in the immediate future. That said, 2017 is a new dawn of change, a year in which questions will be answered and nerves settled, and a year in which the property market can jump back on its horse and continue its exciting journey.

Average marketing prices for December (based on Zoopla data)

Sales 1 Bed 2 Bed 3 Bed 4 Bed 5 Bed
Chiswick £ 458,297 (-19%) £ 691,322 (+2%) £ 1,075,500 (-5%) £ 1,507,669 (-4%) £ 1,943,948 (-6%)
Ealing £ 472,962 (+1%) £ 608,781 (-1%) £ 787,647 (-) £ 1,071,755 (+2%) £ 1,631,011 (-18%)
Isleworth £ 302,904 (+3%) £ 455,922 (-3%) £ 558,319 (-) £ 752,858 (+2%) £ 1,116,186 (-5%)
Brentford £ 463,256 (-3%) £ 643,925 (+5%) £ 795,954 (-6%) £ 1,127,214 (+7%) N/A
Hammersmith £ 646,550 (+2%) £ 1,038,603 (+3%) £ 1,662,411 (+5%) £ 1,486,517 (-3%) £ 2,756,912 (+11%)

Lettings (pcm) 1 Bed 2 Bed 3 Bed 4 Bed 5 Bed
Chiswick £ 1,599 (+1%) £ 2,177 (-2%) £ 2,924 (+1%) £ 4,128 (+4%) £ 4,580 (-6%)
Ealing £ 1,350 (-) £ 1,840 (-1%) £ 2,486 (+3%) £ 2,986 (+3%) £ 4,289 (-4%)
Isleworth £ 1,044 (+1) £ 1,363 (-4%) £ 1,749 (-4%) £ 2,393 (-5%) £ 3,428 (-10%)
Brentford £ 1,432 (-1%) £ 2,007 (+2%) £ 3,166 (-) £ 2,286 (-1%) £ 2,857 (-3%)
Hammersmith £ 1,533 (-5%) £ 2,282 (-1%) £ 3,337 (-) £ 4,678 (-6%) £ 5,731 (-1%)