HMRC’s report shows that rising house prices and an increase in the number of sales pushed the total raised by Stamp Duty up by 16% to £7.5bn out of which a staggering £3bn was linked to sales in London with a further £2bn generated from 10 areas in and around the capital.
In fact the borough of Westminster alone produced £487m, a figure that represents 6% of all of the residential sales made in the UK during the year. Neighbouring Kensington & Chelsea was second with £451m and in Surrey, Elmbridge (an area that includes the increasingly desirable town of Esher) yielded £93m.
But the top 10 isn’t just made up from traditional 'des-res' areas. Between them up and coming Lambeth and Hammersmith represented over 1% of the total.
Interestingly the report also highlighted that although the proportion of total tax taken from the top 10 boroughs fell from 28.3% in 2013-14, HMRC actually received £100m more. In addition when combined, the overall stamp duty from London and the south-east represented 62% of the total received from the UK. In cash terms, that is over £1bn higher than the combined total from all of the other regions of the UK.
HMRC’s commentary stated there had been a change in where most of the money was coming from:
'In 2014-15, nearly 47% of residential SDLT revenue came from property transactions under £500k compared to about 64% in 2006-07. This is partly due the higher tax rates on higher value property but also suggests the high value end of the housing market was less affected by the 2007-08 market crash.'
Property experts fear that these figures will drive an even wider gap between the property markets of London and the south-east and those in the rest of the UK. The latest figures from Nationwide Building Society show categorically that the annual rate of growth in the capital continues to increase pushing the gap between average prices in the south-east and the rest of the UK to its widest ever.
However property firm Savills have said they feel the top end of the market has been affected by the Chancellor’s stamp duty changes. They report the prices of the properties that now face the biggest increase in stamp duty – those valued at over £2m - have started to fall and fall roughly in line with the increase in tax.
Their figures suggest homes costing £2m to £3m prices have dropped by 1.1%, those costing between £3m and £5m are down by 2.4% and those priced at £5m-plus have fallen by 4.7%. At the other end of the market the cost of houses priced between £500,000 and £1m has risen by 3%.