Estate agents warn of sales slide despite rise in stamp duty revenue

eaton square London
Eaton Square London
Image credit: Property Division

Property sales in London will remain subdued until greater political and economic certainty returns, estate agent Foxtons has warned after reporting sales growth of just 3.4% in 2014.

Chief executive Nic Budden said 2014 was “a year of contrasting halves” with a very strong start but a sharp downturn towards the end.

Foxtons is not the only estate agent to report a flattening housing market. Countrywide’s joint London and premier business saw a 14% fall in sales in the final quarter of 2014.

But according to London Residential Research, sales in 2014 totalled 12,900 homes in the capital, compared with 12,700 in 2013, a 1.6% increase.

And mortgage lender Halifax is forecasting that stamp duty revenue will hit a record high of £8bn in the current financial year.

Stamp duty takings across the UK “comfortably exceeded” the £6.68bn peak seen at the height of the housing market boom in 2007/08, calculations based on a report from the Office for Budget Responsibility by mortgage Halifax suggests.

This is despite the introduction of new stamp duty rates in December that cut the amount that the majority of homebuyers pay.

Homebuyers no longer pay any stamp duty on the first £125,000 of a property purchase, then 2% on the portion up to £250,000, 5% on the portion up to £925,000, 10% on the portion up to £1.5m and 12% on anything over £1.5m.

In London, 98% of property sales are liable for stamp duty compared with 47% in the north of England, 65% in the West Midlands, 56% in Wales and 83% in East Anglia.