The UK’s luxury property market is dwindling as sales above £10m have fallen by 86% year-on-year, Land Registry data analysed by London Central Portfolio shows.
From June to August there were just five registered sales over £10m compared to 35 in the same period of 2015 – an 86% reduction.
The slowdown will hit government stamp duty receipts, which have fallen by £45m in the £10m plus sector over the period.
Naomi Heaton, the chief executive of LCP, said: “Overall, this slowdown in the luxury property market – a big contributor for the Exchequer and UK economy – is very concerning.
“As the government faces the daunting task of negotiating Brexit together with a potential slowdown in the UK economy, it should consider its strategy on residential property taxation carefully to ensure it meets its objectives of increasing revenues.
“Ironically, the rapid devaluation of sterling, now attracting foreign investors back to London, may be the biggest hope of salvaging a potentially embarrassing and costly situation.”
In the three month period there were no new build sales and no sales outside Prime Central London postcodes, despite the pair making up 23% and 30% of sales from June to August last year.
The average price paid for the top five most expensive sales fell by 25% from £22m to £16.3m.
Heaton added: “A price correction was inevitable and is widely reflected in reports of price discounting.
“Whilst the long term outlook remains compelling as a global destination with limited stock available, the luxury market is likely to experience continued instability especially in the face of the forthcoming ‘look through’ non-dom inheritance tax.
“Just as we have seen in the past, it may take some years to correct, with prices recalibrating themselves before growth returns.”