The 3% stamp duty surcharge has ‘shattered’ the property market one year from its introduction, a report from proptech startup Nested said.
House purchase transactions fell by almost a fifth (19%) across England and Wales and by a third (35%) in London one year after the surcharge came into force in April 2016, Land Registry and Zoopla data shows.
The top end of the market has been hit especailly hard, as below £500,000 41% of properties are currently under offer, but that’s the case for 18% between £1m and £2m and 9% above £2m.
Matt Robinson, chief executive of Nested, said: “The evidence is now crystal clear – the government’s stamp duty land tax reforms shattered the property market.
“In the 12 months since the 3% surcharge was introduced, national property transactions fell 19% across the country and a massive 35% in London.
“Anything above £500,000 outside of the capital just isn’t selling.
“Brexit hasn’t helped the situation but the data shows that the government’s stamp duty tinkering has stalled the market.
“This may have slowed rising house prices, but it has also stopped sales going through and has left many people stuck in their current property, unable to move up the ladder.
“Policy-makers need to look at how the market functions and find ways to increase fluidity in the system.
“Everyone will gain if we can open the floodgates on the supply of properties and loosen up the market so it is easier and more cost effective for people to buy and sell.”