The high-end market in parts of prime central London is in the doldrums because of a glut of £2m-plus homes put on the market in the wake of the Conservatives’ election victory.
Rightmove says that in just one month up to June 15 there was a remarkable 86 per cent increase in the number of homes on sale priced £2m and above.
In their scramble to find buyers, sellers of these more expensive homes are already reducing their asking prices. Zoopla says more than a fifth of homes on sale originally for £1m or more have had their asking prices reduced, by an average of more than £185,000.
The latest Royal Institution of Chartered Surveyors market summary included a statement from Charles Puxley, director of sales at Jackson-Stops & Staff’s Chelsea office, saying that “the central London market has virtually come to a halt...there are very few buyers.”
Lulu Egerton, a partner at Strutt & Parker, says in the latest Rightmove market summary that the election result “discombobulated the market and I think a lot of people are still taking stock in the aftermath.”
“There’s nervousness about what might be in the government’s extra Budget on July 8 and people are thinking twice because of stamp duty” notes Tom Hudson, a partner at buying agency Middleton Advisors.
Since Chancellor George Osborne’s stamp duty reforms were introduced in December, the buyer of a home priced at £2m has had to pay £153,750 - before the change the duty would have been just £100,000. If the home costs £5m the stamp duty is now a whopping £513,750 whereas before it would have been ‘only’ £350,000.