In the days that followed the Conservative Party victory in May, the widely-held assumption was that normal service would resume at the prime end of the London housing market with double-digit annual growth.
It was a proposition that never looked likely for several reasons, the principal one being a rise in stamp duty last December that attracted fewer headlines at the time than the ‘mansion tax’.
The chancellor’s decision to undertake the long-overdue reform was welcome. A progressively-structured tax means more first-time buyers and home-movers will pay less when they buy a home and there is every indication policymakers are now turning their attention to supply – making sure there are enough new homes to meet demand across London and the rest of the country.
However, there is a risk the higher rates of stamp duty for properties worth more than £1.1m may be self-defeating. Irrespective of the political dimensions to the debate around high-value residential property, there will be an impact on revenue if buyers baulk at transaction costs.
And that appears to be the reality on the ground, after official figures published on Tuesday suggested the number of transactions at the top end of the market are dwindling.
Some buyers are thinking twice, some have put decisions on hold and others have decided to rent instead.
We have calculated there was a 21 per cent slump in the number of £1m-plus sales in the year to April 2015, compared to the previous 12 months, a figure adjusted for house price inflation.
That means that the government is getting less from properties at the higher end of the market. Tuesday's figures suggested the contribution of the highest-yielding local authorities is declining. Westminster and Kensington & Chelsea contributed 12.5 per cent of the country’s stamp duty in the last tax year, a decline from 14.4 per cent in 2012/13.
To some extent this may be explained by a pick-up in sales in the rest of the country as lower stamp duty led to more transactions elsewhere.
However, the rate of growth for stamp duty revenue in Westminster and Kensington & Chelsea has slowed and remains below the UK average.
The new stamp duty rules have only been in place for a quarter of the year and the prospect of a general election may have played a part, but stamp duty revenues in Kensington & Chelsea grew by 1.6 per cent in 2014/15 compared to a rise of 27.6 per cent in 2013/14.
In Westminster, the rise was 13.3 per cent versus 19.4 per cent in 2013/14 and the increase was 6.5 per cent in Camden compared to 36.6 per cent the year before. Across the UK, revenue grew by 16.3 per cent compared to 31.5 per cent in 2013/14.
It is a direction of travel that suggests this time next year the figures could make even more uncomfortable reading for the Treasury.