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Boris Johnson pledged last week a reversal of the high-end stamp duty changes made by George Osborne in 2014, that could see a boost to the prime property market in the UK.
Previous to December 2014, any property between £1 million and under £2 million was charged stamp duty tax at a rate of 5 per cent, with anything over £2 million being charged at 7 per cent.
However, Mr Osborne’s changes meant that this increased to 10 per cent on anything between £925k and £1.5 million, and 12 per cent over £1.5 million, with stamp duty tax for homebuyers skyrocketing by as much as £60,000.
This attack on high-end homeowners and investors had the desired impact with the far higher cost of stamp duty tax, causing transactions to drop and prices soon followed suit.
The average sold prices for stock above £1.5 million in London fell by -3.41 per cent (£101,410) in a year and in London’s super-prime market, the average sold price for properties above £10 million plummeted by -4.66 per cent (£738,653) during the same time.
But it wasn’t just London that was impacted, a similar decline was seen across the whole of England and Wales, with the average sold price above £1.5 million down -3.72 per cent, falling -4.15 per cent above £10 million.
However, should Boris make it into power and keep good his promise of a stamp duty reversal, the prime property market could see a welcome price boost in buyer demand and house price growth.
London property owners are likely to gain most, but if implemented, this reversal could see the prime market across England and Wales also return to health.
While this research is focussed solely on those buying for residential purposes, it would of course, improve the outlook for those looking to invest as rates would again drop despite the additional 3 per cent for second home and buy to let properties.
Founder and CEO of Vyomm, Utsav Goenka, commented: ‘Despite the string of attacks against the high-end homeowner in London and the wider nation as a whole, the prime and super-prime market has weathered the storm, remaining a very attractive investment for those with the financial means to do so with transactions showing strong growth in recent months.
‘However, a reversal of these stamp duty changes could provide the adrenaline shot that is needed to entice more buyers back to the prime and super-prime markets and this will see prices increase notably when it happens.’