Stamp duty reform caused prime London house values to fall by 0.5% in the first quarter of 2015, compared to the same period in 2014, according to new research from Savills.
The report highlights how prime central London housing markets have been most affected by increased stamp duty charges and consequently, values are down 4.3% year-on-year.
Despite the drop, Savills estimates that the prime London market will rise by 23% over the next five years assuming no further taxation of high-value property.
By contrast, prices of homes below the £2m threshold in the prime regional markets continue to show year-on-year price growth, rising by 1.1% in the first quarter of the year.
Lucian Cook, head of UK residential research at Savills, said: “As we forecast in November, uncertainty regarding the general election and the potential for further taxation of high-value property have contributed to a subdued market in the first part of 2015.
“The stamp duty changes came after five-and-a-half years of sustained price growth for prime London property. This segment of the market is now looking fully taxed and sellers are having to factor in price adjustments equivalent to the stamp duty increase.”
