Stamp Duty cliff-edge means price renegotiations underway

Price renegotiations are underway between buyers and sellers in danger of missing Wednesday’s stamp duty holiday deadline, says Knight Frank.

The agency says stamp duty - even though the largest savings will cease from July 1 - will continue to exert a major influence on the housing market for the rest of the year.

However, Knight Frank data shows that some London asking prices have been weaker than those elsewhere in the country - and this may give an indication of where the hardest negotiating may go on between sellers and buyers not completing before Thursday. 

Eight of the 10 local authorities that saw the highest proportion of asking price reductions between January and the middle of June this year were in London.

The south London borough of Lambeth was the local authority to register the largest percentage - 41 per cent - of properties going under offer at a reduced asking price in the period.

The top five was completed by Crawley (39.6 per cent), Tower Hamlets (39.5 per cent), Surrey Heath (38.4 per cent), and the north London borough of Islington (37.8 per cent).

The five parts of England with the lowest number of asking price reductions were Broxtowe in Nottinghamshire (11.1 per cent), Eden in the north-west (11.2 per cent), Sheffield (11.6 per cent), Ryedale in Yorkshire (11.9 per cent) and Cornwall (12.6 per cent).

“Given the much-publicised race for space, it is no surprise that there has been a higher proportion of reduced asking prices in the capital during the pandemic” says Tom Bill, head of UK residential research at Knight Frank. 

“It is the part of the country where the impact of the taper will be felt least due to higher average property prices, but this flexibility will support activity in coming months.”

Local authorities in the capital also experienced three of biggest five average asking price reductions during the period.

The top five comprised Eden (8.1 per cent average reduction from initial asking price), Westminster (6.9 per cent), Kensington & Chelsea (6.6 per cent), Islington (6.4 per cent) and Preston (6.3 per cent).

The smallest average reductions took place in Gosport, Wyre Forest, East Cambridgeshire, North West Leicestershire (mand Harlow in the East of England - all between 3.4 and 3.6 per cent down.

The average discount in England was £15,217, which was in excess of the £12,500 maximum saving during the taper period. The average reduction was greater than £12,500 in 59 per cent of the local authorities.