Haart today revealed that its branches within the M25 recorded an increase in sales activity of just 1.1% month-on-month during September compared to a 75% increase for its branches 100 miles or more outside the capital, painting a worry picture of the struggling London property sales market.
“The evidence from our branches is that areas around 100 miles from the capital are where the market is reviving, and this is spreading towards the South East and London – a complete reversal of the traditional ‘London first’ pattern we’ve grown used to,” says Haart CEO Paul Smith (pictured).
Land Registry data shows that the number of homes sold in London reduced by two-thirds between March and June this year, before the Brexit vote. The slump has been blamed by agents such as JLL squarely on the recent increases in Stamp Duty and Land Tax (SDLT) at the top end of the market.
Homes for sale over the SDLT threshold of £925,000 now make up 34% of all homes for sale in London so the changes have been keenly felt in this price band, plus many agents blame the extra 3% SDLT for hammering the number of landlords buying property there too.
The government seems to get the pain being felt. Communities secretary Sajid Javid said at this month’s MIPIM gathering that the Autumn statement by the Chancellor Philip Hammond would be the ‘first opportunity’ to correct the slowdown in London.
And it’s no surprise. Half of all SDLT revenues come from London, and latest figures from HM Treasury reveal that the increases in property taxation introduced by the former Chancellor George Osborne are now starting to dent government revenues.
SDLT levied on resale properties has dipped over the past 12 months by £345 million or 3% to £9.568 billion, although this has been partially offset by an increase in Capital Gains Tax revenues recently as many landlords have exited the market.