Lower end of the market is suffering due to the Stamp Duty changes | AVRillo

Lower end of the market is suffering due to the Stamp Duty changes

Monday 23 November 2015  / Ruth Montia

Stamp duty

It has  been blamed before, but another has spoken out saying that the new stamp duty thresholds are the reason there is  fewer affordable homes be being built.

Head of Residential Land Bruce Ritchie, says the profit produced on new-build flats priced at £1.5m or more, funds the affordable housing that is also built as a result of a development.

Since stamp duty increases last year on homes costing £937,000 or more, the demand for high-end flats has dropped.

Ritchie in Property Week says “Put simply, higher stamp duty at the top end is choking off the supply of affordable housing, with the result being fewer homes overall”

He believes that unintended consequence of the stamp duty changes is that developers are stepping up the supply of one-bedroom units that fall well beneath the £1.5m limit, distorting the mix of homes supplied.

He believes “As the figures for the end of 2015 come through, the 30% fall-off in sales volumes experienced by properties in excess of £1.5m will have far-reaching consequences”.

Ritchie sums up his article saying “It is clear that the Chancellor has succeeded in cooling the market, but the figure of 12% stamp duty was an overshoot and should be reassessed to nine per cent between £1.5m and £6m. Unless the Chancellor wants to see his overall stamp duty take continue to fall, he will adopt this measure in his November 25 Autumn Statement”.