Fears Over Stamp Duty Reforms

News regarding property prices in London is seemingly never out of the headlines, and the past few weeks in particular have seen a number of interesting reports regarding the London housing market, following the recent stamp duty reforms.

In his recent Autumn statement the Chancellor George Osborne unveiled plans for sweeping changes to the stamp duty system. These changes have been welcomed by many, including a number of property experts, who predict it may provide a welcome boost to the UK’s property market, which had been showing signs of ailing of late.

However there’s one area of the country in particular where the changes to the stamp duty system have been welcomed less warmly, namely London.

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According to The Telegraph, there are fears that the new system could trigger a collapse in the higher end of the London property market. This is because whilst the reforms are expected to cut stamp duty for 98% of buyers, the levy will in fact increase for homes worth more than £1.5 million. For example, an individual buying a property in central London for £1.5 million could be £18,750 worse off under the new system.

This is causing plenty of concern among property agents in London, who predict the luxury property market will be hit heavily by the changes, with estate agents forecasting that wealthy homeowners may be forced to cut the asking price of their properties in order to attract buyers.

The Chancellor’s announcement came as a surprise to many and triggered a panic among estate agents, with many scrambling to close deals before the changes came into effect in an attempt to save their clients money.

The stamp dusty reforms are also expected to have a noticeable impact at the lower end of the market too. As reported by the Financial Times, The Office for Budget Responsibility has estimated that these reforms could inflate house prices further. This could spell bad news for buyers, as there are also fears that lower down the market, this may counteract any savings buyers would have made thanks to the lower tax rate.

Reports such as these highlight the often unpredictable nature of the London property market, which can seem like a bit of a minefield to negotiate at times. However here at Search Mortgage Solutions we can help. If you’re looking for a mortgage broker in London, our London-based mortgage advisors can help you find the most appropriate mortgage for your individual needs and requirements. For more information about our services please don’t hesitate to contact us, and a member of our knowledgeable team will be happy to help you with your enquiries.