High-end market 'toxic' thanks to stubborn sellers, foreign buyers, SDLT

Estate agency Carter Jonas has made critical comments about the high-end housing market, suggesting a combination of factors have created “a toxic landscape”.

Rory O’Neill, head of residential at the agency, says market inactivity at the higher end in London can be traced back to the stamp duty reforms of December 2014. 

“The increased transactional costs for properties priced over £925,000 is the only negative stalling the market - even the attractiveness of the pound to dollar based buyers, affordable borrowing and pent up demand cannot overcome the crippling transactional costs of moving house” he says.

He then goes on to say that “with a vendor reluctance to adjust the asking price of their property and an emerging reliance on overseas money to inject liquidity into the market, we are cultivating a potentially toxic landscape for residential property.”

However, although O’Neill calls for high-end stamp duty to be reformed by Chancellor Phillip Hammond in his Autumn Statement today, another leading estate agent - Jeremy Leaf, former RICS residential chairman - says such a move is unlikely.

Leaf, who runs a north London agency, says: “Reversal of the stamp duty changes made in December 2014 or March 2016 and/or assistance for downsizers is unlikely, despite the consequences of lower tax revenues, reduced job mobility, employment and increased house building for the wider economy, which is harder to quantify.”

He says more likely measures to be announced include further support for Build To Rent, backing for factory-based modular house construction methods, more public sector land availability and easier planning processes. 

“The impact of new tax and legal obligations on landlords has reduced investor appetite to enlarge portfolios, which has reduced the supply of affordable homes and added to upward pressure on rents making deposit saving even more difficult for aspiring first-time buyers. As a result, first-time buyers have not been able to take advantage of lower competition or softening prices” Leaf claims.