Knight Frank’s chairman calls for a reversal of changes to stamp duty tax
Chairman of the estate agents Knight Frank has called on the UK government to reverse changes to stamp duty taxes.
Former Chancellor George Osborne increased the rate of stamp duty of second homes, a change that came into effect at the beginning of April, leading many buy to let landlords to flee the property market. There was a spike in transactions before the tax came into effect, and the number of transactions dropped off sharply afterwards.
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Alistair Elliott, senior partner and group chairman at Knight Frank told City PM: "We are anxious for the new administration to give us signals quickly with their intentions with property tax.
"They need to signify a ceasing in any additional stamp duty and it would be great for them to indicate a reversal of the trend. Increasing tax doesn't increase housing supply."
The taxes have hit prime central London properties particularly hard. Tom Bill, head of residential research at Knight Frank, said recently that stamp duty changes have had a bigger effect on high-end homes than the Brexit vote. In Chelsea, house prices fell by 10 per cent year-on-year in September.
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"It has been significantly impacting those offices," Elliott said. "We've got to counter that by establishing more offices, more offices in other zones with more volume in the market."
In the past year Knight Frank has increased the number of its offices in London from eight to 30, and the company has been focussing on places where there is "great scope for market share", Elliott said.
For overseas investors, the extra cost of stamp duty on expensive homes has been countered by the fall in the value of the pound since the Brexit vote, meaning they may become more active in the market.
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However, foreign home ownership has come under scrutiny in the capital, as London mayor Sadiq Khan has launched an inquiry into overseas investors and the impact they have on London's house prices.
Elliott welcomed the inquiry, but said: "We’ve had foreign home ownership for centuries and I hope it will stay with us for the future because it is part of a vibrant global economy.
"We need to be a welcoming city."