The estate agents are not panicking in Clapham, an area of south London where a family home typically costs between £1m and £2m and stamp duty charges will now be much higher.
The phones started ringing straight after the chancellor’s surprise announcement that wealthy homeowners will pay more tax. Robin Chatwin, who looks after sales for Savills said it was reminiscent of his first weeks as an agent, in 1988, when a mortgage interest tax break for couples was just about to be scrapped.
“Those two weeks were absolute madness – it was just like that on Wednesday night,” he said.
As well as rushing through deals that had already been agreed, the agency did one entire deal – from offer to exchange of contracts – in the same evening, saving the buyer of a £5m house more than £160,000.
Thomas Crabtree, area sales director at Marsh & Parsons, said clients were quickly on the phone asking what it meant, and there were concerns about potential sales falling through as buyers realised how much more they would have to pay.
By Thursday afternoon, things had settled down but there was some renegotiation going on. “I have a buyer who is trying to pass on the increase to the seller,” said Chatwin. “The vendor’s initial reaction is no.”
At James Pendleton, one of several high-end estate agents in a street near the common, advertising sizeable terraced properties for just under £1.5m, Peter Clarkson said he had heard from buyers trying to cut deals and a seller who thought they might be able to benefit.
“They asked if the buyer would split the difference on the money they were saving. You get nothing without asking,” he said. “He got nothing.”
The agents in Clapham thought the market might slow down for houses worth between £1.6m and £2m where the new rates hit especially hard - no one was worried about prices going down, even above £2m where the threat of a mansion tax still looms.
Annual price inflation in the borough of Wandsworth hit almost 25% this year, although prices have since fallen back a little. But the stamp duty change is not expected to cause any further drop.
“You are going to have buyers further down the market who suddenly have more money, which will lead to price inflation, which will automatically filter through to the higher band,” said Clarkson. “If you’re selling an £800,000 flat for £20,000 more than before then you’ll have more to spend.”
Crabtree said that the changes made a mansion tax less likely, and this would also lift the market above £2m.
“When the next £2.5m buyer comes in next year this will just be how things are.”
