Research by Zoopla has revealed the total earned by agents every year in fees from sales and lettings, highlighting how it pales into insignificance compared to the Stamp Duty paid by home movers to HMRC.
The company’s Research and Insights Director Richard Donnell (left) told delegates at Friday’s Negotiator Conference that while buyers, renters, landlords and vendors combined spend £3.9 billion on agency fees every year, the government collects £9.27 billion in residential Stamp Duty, or nearly two-and-a-half times as much.
The duty is also increasing; HMRC’s latest figures show that last year the amount of duty paid on average by purchasers increased by 7%, largely due to the increases duty for properties in the higher price brackets.
Stamp Duty problems
Agents have become increasingly vocal about the problems that Stamp Duty is creating, particularly in the £500,000-plus sales market, including lower sales and greater difficulties getting buyers to make an offer as they baulk at the huge Stamp Duty bill.
This, economists agents and politicians have been pointing out, is an example of the famous Laffer Curve.
It is a theory made popular during the 1980s in the US and it argues that there is a point at which people will begin curtailing their economic activity if taxation gets too high.
Many agents believe the Stamp Duty system brought in by George Osborne is already tipping the market into Laffer curve territory, and that the figures from Zoopla support this point of view.
This is particularly important in London, Donnell’s research reveals. Of the £3.9 billion earned by agents each year, £1 billion of comes from London while £2.9 billion originates from the rest of the UK.