The Chancellor’s “outrageous” stamp-duty hikes came under fire yesterday, with the boss of one of the UK’s biggest housebuilders claiming that the tax raid risked “killing the golden goose”.
Steve Morgan, the multi-millionaire founder and chairman of Redrow, said the move had “decimated” the central London property market. His comments followed research from the property agent Knight Frank showing that stamp-duty takings in London were down by £105m to £2bn in the first 10 months of last year.
Under changes announced by George Osborne in December 2014, a new banding system for the tax was introduced that put up the cost of stamp duty for anyone buying a house worth more than £937,500.
Mr Morgan said: “Central London has been killed by stamp duty. It has killed off all the high-end properties, although it has not had the same effect in the suburbs because the values are not as high. Houses approaching £1m have been decimated by the quite frankly outrageous stamp-duty taxes which are probably the highest property taxes in the world.”
He added: “The Government is collecting less money as a result. It looks like a political change rather than a fiscal one. Why would the Chancellor want to take less taxes, which is what is happening? It’s killing the golden goose, isn’t it?”
Meanwhile hedge funds have been taking bets against property companies with London exposure. Three funds – Odey Asset Management, BlueMountain Capital Management and Anchorage Capital – were all shorting the shares of FTSE 100 developer Berkeley Homes last month.
Redrow was largely insulated from the effects of the duty hike after shifting its focus to areas outside the centre of London. It reported a 14 per cent rise in pre-tax profits to a record £104m for the six months to 31 December.
