Rich purchasers stay away after Stamp Duty hikes

Buyers of expensive properties are staying out of the market, following this year’s Stamp Duty hikes.

Some are also ‘sitting on their hands’ while waiting to hear details of the proposed annual tax on homes priced at £2m and above and which are owned by ‘non-natural persons’ – an issue which remains outstanding, despite David Cameron's comments in interviews that he will not go ahead with any mansion tax proposal.

Philip Selway, managing partner of Knight Frank’s Buying Solution, said: “In both the London and country markets, there has been a noticeable falling away of interest in property above £2m.”

But, he said, super-wealthy overseas buyers were undeterred. He said: “In the home counties, there has been a substantial increase in transactions at the top of the market, with 12 purchases above £15m so far this year, compared to just one in 2010.”

The firm has reported a growing ‘flurry’ of price reductions in the £2m to £3m price bracket.

In London, Naomi Heaton, of London Central Portfolio, said that residential purchases over £2m have fallen by 25% since the Budget.

Knight Frank has put the reduction at 29% and Hamptons at 33%.

Heaton said: “Investors and developers who would have previously bought for over £2m are now considering other options and voting with their feet.”