Property above £2m has effectively just gone up in price by 2%. Already expensive property has just got a bit more. However property in our market has consistently outperformed over the medium and long term and – although the costs are now higher – no doubt homeowners will recoup these costs over time.
What is more important – now more than ever – is good estate agency. Our role is to support our clients’ property values and to maintain the market in a controlled and effective way. The SDLT levy raise is a delicate issue that needs to be handled professionally – and if done so we can all be better off in the long run – whilst doing our bit to bolster the Exchequer’s revenues and help our country in this difficult economic climate.
Buyers viewing property that falls just within the higher tax band will, understandably, seek to do a deal under the threshold and save themselves £40,000 in tax.
The £2m+ sector is where a great deal of London’s activity has been focused, and it’s been responsible for keeping the wider market liquid. While it’s easy to believe that the majority of buyers in this price range are wealthy investors, there is in reality a very strong home owner contingent buying at this level. And these buyers have jobs, salaries, families, and mortgages. Finding an extra £40,000 isn’t necessarily effortless. So there’s little question that the market will be affected.
Having said all that, it is our job as agents to help deal with the situation through a combination of sensible valuation and negotiation. Taxes are a necessary evil and are never going to go away. In time, the market will adjust to compensate, but in the short term, empathy and flexibility are the key to keeping the market moving.