Stamp Duty Increase Unlikely to Affect Prime Market

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On 6 April, the government’s proposed 1% increase in stamp duty, from 4% to 5%, on properties selling £1million and above takes effect.

Almost 30% of sales agreed in Winkworth's central London offices were in the £1 million plus bracket.

It is widely expected that this increase is unlikely to affect the prime market. But, says Alex Thompson, director at London estate agents, Winkworth Notting Hill, buyers currently in negotiation will be looking to complete sales before rise takes effect. “The impending increase in stamp duty has generated impetus on the demand side and we are currently negotiating on four properties priced between £2 to 3 million, all with buyers looking to complete before 5 April. In these cases, the new stamp duty levy would incur an additional £20,000 to £30,000 in taxes.”

Adrian Philpott, Sales Manager, Winkworth West End, adds that the additional duty at these price levels is not likely to deter buyers: “Although buyers have occasionally mentioned the stamp duty increase, we don’t expect it to be a deciding factor for many of them of this calibre. The increase in duty may have a marginal effect around the £1million mark, but once you enter the £2million plus market, the extra £20,000 or so in tax is not the deciding factor. Currently, there is a shortage of quality stock on the market, so if someone finds a property they really like, they will buy it a price they’re prepared to pay regardless of the additional tax”.

On the supply side, it is unlikely there will be any significant increase of property to the market, although, adds Alex Thompson, there are some London residential sellers who will be looking to beat the stamp duty increase: “We have recently taken on a property which the vendor had initially planned to market in June, and have brought forward with the aim of achieving a sale before 6 April”.

The stamp duty rise will mostly affect homebuyers in the South East, and central London in particular. In January 2011, almost 30% of sales agreed in Winkworth’s central London* offices were in the £1million plus bracket.

For more information please contact Bola Sodeinde at Winkworth press office on +44 (0) 208 576 5598

Notes to Editors:

*Winkworth central London offices:
Clerkenwell & City, Kensington, Knightsbridge, Notting Hill, Paddington & Bayswater; Pimlico & Westminster, South Kensington, St John’s Wood, West End.

About Winkworth
Winkworth is a leading franchisor of residential estate agents and is listed on the London Stock Exchange. Established in Mayfair in 1835, Winkworth has a pre-eminent position in the mid to upper segments of the central London residential sales and lettings markets. In total, the company operates from over 80 offices in the UK, France and Portugal, having doubled in size in recent years.

The franchise model allows entrepreneurial real estate professionals to provide the highest standards of service under the banner of a well-respected brand name and to benefit from the support and promotion that Winkworth offers. Franchisees deliver in-depth local knowledge and a highly personalised service to their clients. For further information please visit: http://www.winkworthplc.com

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Bola Sodeinde
Winkworth
+44 (0) 208 576 5598
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