Recent increases in stamp duty are making the top of the property market grind to a halt. The changes came into effect after the budget back in March, when the chancellor, George Osborne, announced a hike in stamp duty from 5% to 7% for homes priced at £2m and above.
Director William Wells said: “People buying houses valued at around the £2m mark find it very difficult to justify paying a minimum of £140,000 in stamp duty. This represents an additional £40,000 compared to the amount they would have paid if they had bought the same property before March this year, and they are simply refusing to do it.
“There is disappointingly limited activity in the £2m - £3m price bracket; and as a result, little movement and few viewings. Of course, people purchasing properties in higher price brackets above £3m still have to pay 7% stamp duty - but those buyers are more likely to have the means to cope with such a figure, so sales are still taking place. It’s homes priced at between £2m and £3m that are really struggling.”
One property which has felt forced to remove itself from this property trap is Owles Hall in Buntingford. The magnificent seven bedroom country house stands in six and a half acres of formal gardens and grounds, complete with former stable block and outbuildings. It has recently reduced its price from £2.35m to £1,995,000 - instantly saving any buyer a staggering £64,500 in stamp duty alone.
Williams Wells added: “Between April and October last year we sold four houses priced at between £2m and £2.5m. This year, we haven’t sold any in this price bracket over the same period of time. It’s really eye-watering.
“It would be too easy to pretend that the top rate of stamp duty wasn’t an issue for the majority of the population, who are moving to homes with much lower values. But the truth is that the impact of such tax rises affects us all. As soon as homes at the top of the market stop selling, it has a ricochet effect down the rest of the property ladder, stalling homes at lower prices as well.”