Stamp duty ‘is deterring high-end property buyers’

The luxury London house-buying market has remained sluggish as pre-election jitters about the threat of a mansion tax have been replaced with stamp-duty concerns, a top property agent warned today.

Hopes of a revival at the upper end of the central London residential market following the Tory victory last month have failed to materialise, Knight Frank said.

The property agent said annual growth slowed to 2% in June, from 8.1% a year earlier.

Notting Hill saw the biggest slump in price growth in the year to June, falling by 2.2%, while in South Kensington there was just 0.9% growth. Knight Frank added that the number of new potential buyers registered with the business last month was at its lowest monthly level this year.

Reduced growth came despite Labour’s defeat, ending the threat of a proposed mansion tax on properties over £2 million.

The market has cooled, partly owing to an increase in stamp duty last December for properties worth over £1.1 million.

“There is anecdotal evidence that the higher rates mean some buyers are currently more circumspect about moving,” said Knight Frank’s Tom Bill.