The latest research from high-net-worth mortgage broker, Enness Global, has revealed that in some parts of the high-end London market homebuyers are still looking at a stamp duty bill of £1.6m, despite today’s announcement.
The chancellor has scrapped stamp duty on property transactions up to the £500,000 mark, a move that will be welcomed by the average home buyer who stands to save nearly £2,500 on their purchase.
Of course, this saving will be more notable in some parts of the market, with the average London homeowner due to save over £14,000 on their transaction. With this stamp duty holiday also applying to the first £500,000 for purchases above this threshold, high-end buyers will also enjoy a considerable saving of as much as £15,000.
Enness Global analysed the current median sold price in London’s most prestigious property postcodes for transactions over £3m so far this year. They then looked at the current stamp duty tax cost and what it will be now with the discount considered.
Across these postcodes, the median sold price for transactions above £3m is £4.9m so far this year. At this price threshold, the stamp duty owed would be £504,394, falling to £489,394 with today’s discount considered.
The N2 postcode is home to the highest stamp duty bill. With a median sold price of £14.1m so far this year, homebuyers would usually pay over £1.6m in stamp duty, although with the discount applied this falls to £1,595,250.
The W1K postcode is also home to a stamp duty bill in excess of £1m. Pre-discount, the median sold price of over £9.2m would have racked up a bill of £1,021,050; however, with the discount applied this falls to £1,006,050.
The W1G, NW8, SW1W, N6, SW1A and SW3 postcodes are also home to a median sold price between £5.6m-£7.5m so far this year, meaning even with today’s reduction, stamp duty will still set these high-end homebuyers back by between £570,000 and £800,000.
Group CEO of Enness Global Mortgages, Islay Robinson, commented:
“It is fair to assume that the average homebuyer needs a more significant financial boost than those buying in the very top tiers of the UK property market. However, it’s also fair to say that the government has mostly ignored the top end of the market in recent years which has had a detrimental impact on demand and property values in the prime London market, in particular.
Today has been much of the same and although high-end homeowners will enjoy some form of discount where stamp duty is concerned, they certainly won’t be getting any richer thanks to Rishi.
In fact, this archaic tax continues to leave a bad taste in the mouth of prime buyers who are paying huge sums in addition to the value of their chosen property and it’s about time this government money grab was abolished completely.”