The number of sales for properties over £1.5 million seems set to drop for the first time in two years, according to national estate agent Jackson-Stops & Staff. This is despite growth of 36% year-on-year from 2012-2014.
Jackson-Stops & Staff has 44 offices nationwide, including branches in Mayfair, Pimlico, Chelsea and Wimbledon Village. Nicholas Leeming, chairman of the firm, said: “The wider UK residential property markets are reasonably buoyant now that we have the General Election behind us and the uncertainties that any potential political changes bring.”
“However, the revision to stamp duty rates late last year has contributed to the widespread stagnation of the higher valued markets in 2015, both in London and the country, where many properties are finding it difficult to attract buyers.”
He added: “Sale volumes have plateaued across the country in response to high transaction costs, reflecting the fact that the UK has one of the highest taxed property sectors in the world.”
Under the new stamp duty reforms – introduced by Chancellor George Osborne in December last year - people buying homes between £925,001 and £1.5 million have been hit with an additional 10% bill. Those buying property costing above £1.5 million have seen an extra 12% charge.
Leeming said the house owner population is an ageing demographic, with too few younger entrants getting onto the property ladder. “Mortgage funding is difficult to raise for people in their forties, even if they have been previous house owners, irrespective of their credit history,” he went on. “We need to encourage trading down so that larger houses are released to families needing more space.”
The changes to inheritance tax, Leeming believes, will incentivise older house owners to trade down, but he also wants measures to “enable property owners to move without new restrictions to mortgage funding and reduce the top levels of stamp duty to free up the higher value markets at no net loss to the Exchequer.”
Alastair Hancock, Director at Jackson-Stops & Staff in Sevenoaks, says his branch has also seen a downturn in the volume of sales of properties over £1.5 million.
“Over a third of our available stock is priced in excess of £1.5 million and this is no wonder given what little incentive there is for buyers at the mid to high-end of the market currently. Since the stamp duty hike last December, we have seen a significant decline in volume of sales at this level as the 12% rate continues to penalise the country house market, which is still struggling to recover from the recession.”