Local agent blames "exorbitant cost of stamp duty"

A dip in sales volumes in the local property market is being blamed on high taxes by a local estate agent.

During the first quarter of this year, according to the Land Registry, there were 14.8% fewer properties sold than in the previous quarter. 282 homes changed hands at an average price of £579,024. This is well below the peak levels seen last Summer. Over the past 12 months the number of sales in the SW15 area has increased by 65.9%, and over the past ten years the average price has increased by 84.8%.

Although transaction volumes are down in the short term compared with this time last year there has been a substantial rise and volumes have more than tripled from levels seen during the financial crisis.

Local agent Allan Fuller commented: "The drop in average price is merely a reflection of fewer high end sales, the lower volume is the really interesting factor. We can certainly see for ourselves in  our office the increased demand because we have such a vast number of potential buyers on our books.

"The problem is that the supply reduced, so overall values can only go up, that is the most simple rule of economics, in Putney we are generally seeing an increase of anything between 10% and 15% in the agreed sale prices we are achieving for properties that we are selling compared to last year. "

He continued: "The really interesting factor in the published information is that less property is being sold, this is solely because fewer people are moving on, and one major reason for this is the exorbitant cost of stamp duty, to buy a house at say £1,250,000 means a tax payment by the buyer of £62,500 and at £2,250,000 a staggering £157,500. It is easy to say, ah, these are rich people they can afford it, but as has been conclusively proved if tax rates are set to high tax revenue reduces.

"In the case of property people are staying put and extending not moving, but this is unfortunately reducing the amount of movement in the property market, a classic case of the result of unforeseen consequences! So we have less property being brought to the market, thereby pushing up prices, but don’t hold your breath, no political party will bring rates down so this situation will not change in the near future!"

Over the last twelve months London as a whole has seen a rise in average values of 12.4% making it the strongest performing area in the country. The average house in the capital now costs £414,490.

For England and Wales as a whole, Land Registry figures show that the average prices is up by 5.6% over the last year to £ 169,124 although they are down compared with February.

Repossession volumes decreased by 31 per cent in January 2014 to 979 compared with 1,420 in January 2013.

The most up-to-date figures available show that during January 2014 the number of completed house sales in England & Wales increased by 46 per cent to 63,123 compared with 43,373 in January 2013.

The number of properties sold in England and Wales for over £1 million in January 2014 increased by 61 per cent to 1,011 from 628 in January 2013.

Copyright notice: All figures in this article are based on data released by the Land Registry. The numbers are derived from analysis performed by PutneySW15.com. Any use of these numbers should jointly attribute the Land Registry and PutneySW15.com.

May 16, 2014