New rules diminish value of most expensive London property
New stamp duty rules have reportedly hurt the value of some of London's most expensive properties, with prices in central London falling 4.6% in September compared with the same month last year. The research suggests that some of the new rules introduced in last year's Autumn Statement, which raised stamp duty on homes worth more than £2m, are having the desired impact. While prices of homes worth less than £2m rose, the value of properties worth more than £2m fell.

Savills: London house prices for the Capital’s most expensive properties have been dented by new stamp duty rules

London's most expensive properties have been dented by strict new stamp duty rules, new research from upmarket estate agent Savills has shown, with prices in central London falling 4.6 per cent in September, compared with the same month last year. The heart bleeds…

The research suggested new rules introduced in last year's Autumn Statement, which hiked stamp duty on homes worth more than £2m, are having the desired impact. While prices of homes worth less than £2m rose (three per cent for those in the £500,000-£1m bracket; 0.9 per cent for those valued between £1m and £2m); the value of properties worth more than £2m fell.

Read more: Annual UK house price growth edges up

The higher the price, the bigger the fall: those in the £2m-£3m bracket dropped 1.1 per cent, while homes worth £3m-£5m fell 2.4 per cent and homes valued at £5m or more fell 4.7 per cent.

To be fair, prices across all prime London property (that includes areas such as South Bank, which are outside the traditional "central London" neighbourhoods), rose 0.7 per cent on the quarter – although on an annual basis, growth was flat.

Lucian Cook, Savills' head of residential research, said the new rules had "undoubtedly made buyers more cautious, offsetting any post election euphoria".

“For all but the very best in class properties, many buyers are expecting a discount on last year’s prices at least equivalent to the additional tax. By contrast, stamp duty changes have benefitted properties in lower tiers of the prime market, which have performed more strongly."