Prestige house prices drop most in region after stamp duty increases

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Sales of prestige homes continued on a downward spiral after the Government introduced a stamp duty increase on properties worth more than £2m, Land Registry figures have revealed.

The number of homes which sold for more than £2m saw a 40 per cent year-on-year fall in April to 114, following an equally dramatic 40 per cent annual drop recorded in March during last month’s study.

The Yorkshire and Humber region saw the biggest annual price fall with a dip of 1.9 per cent as well as the biggest monthly fall with a 0.3 per cent drop taking typical prices to £117,908.

London saw the biggest year-on-year increase, with a 6.3 per cent rise taking typical prices to £359,476.

A 7 per cent stamp duty rate was imposed on £2m-plus homes from March 22, causing estate agents to warn that sales further down the property chain would be hit.

Sales of homes worth £1m to £1.5m plummeted even faster – by 47 per cent year-on-year. Sales of properties worth between £1.5 and £2m were down by 38 per cent annually.

Most prestige sales took place in London, which has had strong interest from overseas buyers.

By comparison, sales of homes within the average houses of £150,001 to £200,000 were down by 25 per cent year-on-year, with 7,685 completed purchases.

Elsewhere, the study showed that house prices rose by 0.1 per cent month-on-month and by 0.9 per cent annually in June in England and Wales to reach £161,777.

But analysts said this upward swing was unlikely to last for long as house prices rose far more slowly in the second quarter of this year than in the first.

Ed Stansfield, chief property economist at Capital Economics, said: “The regions reporting the strongest gains in June all experienced similar or larger house price falls over the previous one or two months.

“In other words, the latest sharp rises may be little more than the normal month-by-month volatility in the data.”