Chancellor George Osborne remains convinced that his stamp duty reforms of a year ago benefit over 95 per cent of home buyers but some prime central London agents are nonetheless demanding an immediate reversal of the duty policies.
Chestertons, the high-end central London agency, says sales over £1.4m have been hit badly - and, it claims, it will cost Osborne revenue. As a result, the agency wants Osborne to reverse his reforms at this week's Autumn Statement.
“If the Chancellor hoped the redrafted stamp duty regime would be fiscally neutral, while freeing up the lower end of the market, then it would be fair tp judge the changes nothing short of a disaster. He should revisit this, perhaps revising stamp duty rates on a regional basis” suggests Nick Barnes, Chestertons head of research.
“Kensington and Chelsea have been two areas hit the hardest by duty changes. Buyer habits have changed over the past 10 months: those looking to move up the ladder are simply not prepared to pay a six or seven-figure tax bill, while overseas buyers are also changing tack to side-step this heavy increase in duty, which in turn is increasing competition at the lower end of the market. At the very least stamp duty should be capped so no buyer is being asked to pay a disproportional [sic] percentage” says Guy Gittins, sales director in the Chelsea office of Chestertons.
Meanwhile another high-end London agent, Trevor Abrahmsohn of Glentree Estates, has written an open letter to the Chancellor complaining about stamp duty levied on some of Britain's most expensive properties.
The letter reads: "Despite what you read in the headlines, the Residential Property Market in London beyond £1.5m is grinding to a halt. I know you are not ordinarily concerned about deflation in prices of the more expensive properties in this sector for the moment but, if there is a full-blown recession, it may come up and ‘bite you on the bottom’.
"Transaction numbers are down by 40 to 50 per cent and values by about 10 per cent. ....One of the reasons you should be concerned about this is that the Treasury receipts from Stamp Duty are being deleteriously affected by these tax changes resulting in lower volumes."
Towards the end of his lengthy letter Abramsohn tells the Chancellor: "Your laudable attempts to reform the Stamp Duty Calculator from ‘Slab-sided’ to the more ‘Progressive’ version were well intentioned but the unintended consequences of this was to ‘hit’ the higher end with a ‘sledge hammer’ whilst, at the same time, stimulating the lower end with a tax give-away (call it a bribe) that was needless since this sector was thriving beforehand and didn’t need any further stimulation."
A Treasury spokesman told Estate Agent Today that it was unable to respond as apparently it had not yet received the letter.