Market softening?

There is little doubt that as predicted, changes George Osbourne made in December to Stamp Duty Land Tax has had a dramatic effect on transactions above £2m. My most recent deal agreed for a house that originally went on the market with a guide price of £5m was secured at £3.6m. A 28% reduction!

While many of my sales colleagues are whining about the full impact I suspect there is unlikely to be any change in this years Autumn Statement on 25th November. This is a political action rather than a purely practical one. The Chancellor wants to seen to be sharing the pain with those whom he thinks can afford it (we’re all in it together, remember?) and I’d expect him to make very few concessions.

Once we see the actual reduction in Stamp Duty receipts when they are published next Spring then there may be some chance of changes being made but in the meantime sellers of expensive homes are having to take their medicine. Buyers won’t swallow the additional tax and are passing it straight on in reduced offers. Even selling agents are starting to accept that this is the new norm.