New research has indicated that the housing market has “shattered” since the stamp duty surcharge was introduced last year.
Total transactions across England and Wales dropped by 19% according to the Nested analysis, falling by 33% in London. Combining data from both Zoopla and HM Land Registry, the research suggested that many chose to leave the property market following the SDLT reform in April 2016.
At the top end of the market, the data also revealed a decline in activity, with a large proportion of properties over the £500,000 mark failing to sell.
18% of properties valued between £1 million and £2 million are under offer at present, with the proportion falling to just 9% for properties valued at £2 million or more.
For properties under the £500,000 mark, however, over two fifths are under offer.
In London, the research revealed that 90% of sellers are unable to secure an acceptable offer on their property within 30 days of it being on the market. In the UK as a whole, 15% of sellers received an accepted offer in the first 30 days of marketing their property.
In areas where there are high-value homes, such as in London, the problem becomes more pronounced. For properties here valued over £2 million, only 3% are under offer during the first 30 days. In the UK as a whole, just 4% of properties at this value receive an accepted offer within the 30-day time frame.
Commenting on the impact of the SDLT was Matt Robinson. The CEO of Nested highlighted how the housing market had been affected by the reform as well as how it could be improved.
“The evidence is now crystal clear – the government’s SDLT reforms shattered the property market. In the twelve months since the 3% surcharge was introduced, national property transactions fell 19% across the country and a massive 35% in London. Anything above £500,000 outside of the capital just isn’t selling.
“Brexit hasn’t helped the situation but the data shows that the government’s stamp duty tinkering has stalled the market. This may have slowed rising house prices, but it has also stopped sales going through and has left many people stuck in their current property, unable to move up the ladder.
“Policy-makers need to look at how the market functions and find ways to increase fluidity in the system. Everyone will gain if we can open the floodgates on the supply of properties and loosen up the market so it is easier and more cost effective for people to buy and sell.”
