Henley Property Blog – Slowdown in Sales Following Stamp Duty Changes
Like much of the UK, Henley-on-Thames is starting to feel the impact of stamp duty changes as the market for properties worth over £1.5 million slows significantly in previous months. London, the Home Counties and the South East have been disproportionately hit by this in this lethargy in the market and particularly Henley, where a great deal of properties are priced over the £1.5 million band. In contrast, the market for property priced below £1 million has never been busier. Agents are competing for instructions in this price range as they best houses continue to sell in record times across Henley and the Home Counties as buyers avoid crossing into the higher tax rate.
The stamp duty regime was changed in December last year so that it became cheaper to buy the average home but tens of thousands more expensive to buy more expensive properties. We have definitely seen a knock-on effect of this across the higher end of the market as people become less inclined to spend the big bucks because of the tax bill that comes about as a result.
It has become a vicious cycle where would-be sellers are reluctant to move because of the inflated taxes they would face to pay on a larger house, and as a result, those moving up the ladder have less to choose from and are themselves put off by the stamp duty. Ask any agent and they will tell you that transaction levels are down significantly from this time last year.
In what was almost certainly a deliberate effort from the government to tame runaway property prices, the new stamp duty charges have reduced transactions by as much as 40 per cent in the Home Counties and looks to have undermined prices on top. This is not helpful for buyers or sellers especially at the top end of the market.
Whilst our market is somewhat slower in Henley-on-Thames than it was before the stamp duty changes, it still remains remarkably strong in comparison to other areas of the UK. Luckily for Henley, it will always remain one of the most popular towns in the country and tired Londoners continue to flock here for the lifestyle and commutability, however, despite this, even we are feeling the effects of George Osborne’s stamp duty changes.
Heaton & Partners