Stamp duty replaces mansion tax as Central London house buyers' worst fear as sales of homes worth £1.1m plus fall

Emma Haslett
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House prices in Notting Hill have fallen 2.2 per cent in the past year (Source: Getty)

Mansion tax is so pre-election, darling - these days, the UK's high earners are worrying about one thing: stamp duty. That's according to a new report by upmarket estate agent Knight Frank, which has found the new tax has dented sales of homes worth £1.1m plus.

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The company's index of sales in Prime Central London showed house price growth in exclusive parts of London - including Marylebone, Mayfair and Knightsbridge - showed stamp duty for properties worth more than £1.1m meant "some buyers are currently more circumspect about moving".

"These extra costs have historically taken time to be absorbed by the market and reflected in pricing. It will be telling to see what impact higher stamp duty rates have on overall tax revenues when government figures are released in September," said Tom Bill, head of London residential research at Knight Frank.

(Source: Knight Frank)

Meanwhile, house price growth in central London fell to two per cent in June, from 8.1 per cent a year earlier. The month-on-month rise was 0.5 per cent, higher than May's 0.3 per cent, but lower than last June's 0.8 per cent.

"The number of new potential buyers registering with Knight Frank was at its lowest monthly level in 2015," added Bill.

"While this pattern follows a broad seasonal trend, the absence of any marked reaction to the General Election... underlines the presence of an 'expectation gap' between buyers and sellers in prime central in relation to pricing."

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