Less than 0.5 per cent of homes in Britain will be affected by the increase in the stamp duty rate for multi-million pound homes announced in the budget, according to research by Lloyds TSB.
Lloyds TSB estimates that just 0.2 per cent of all home sales in Britain are worth at least two million pounds and therefore subject to the new 7 per cent stamp duty rate. Even in London, multi-million pound sales account for only 1.5 per cent of all sales.
There are currently around 45,0001 homes in Britain estimated to be worth at least two million pounds.
As a consequence of the increase in the stamp duty rate for homes purchased for more than two million pounds from 5 per cent to 7 per cent, the average stamp duty bill for such homes will rise by 40 per cent.
The number of property sales worth at least two million pounds has risen by 75 per cent over the past five years. There were 739 million pound property sales in Great Britain in the first half of 2011. This is the 75 per cent higher than in the same period in 2006 and 29 per cent higher than in the same period in 2010.
More than three-quarters of multi-million pound sales are in London
78 per cent of all two million pound plus sales are in London2. More than half (57 per cent) of these transactions were in Kensington & Chelsea and Westminster. By postal district, Chelsea recorded the largest number of sales of homes worth at least two million pounds (50). The number of five million pound plus properties sales increased by 48 per cent to 77 in the first half of 2011 from 52 in the same period in 2010. Kensington & Chelsea, Westminster and Camden accounted for 86 per cent of all such sales.
Suren Thiru, Lloyds TSB housing economist, said:
“The impact of the increase in the stamp duty rate for homes sold for over two million pounds on the housing market is likely to be very limited. However, strong demand from wealthy cash rich buyers, as well as limited supply of such properties, is likely to continue to boost the level of activity at this end of the housing market.”
