Property sales in just 10 south-east boroughs contributed over a quarter of the stamp duty collected by the government in 2014-15, generating almost £2bn for the chancellor.
Changes made in December’s autumn statement boosted the amount of stamp duty land tax (SDLT) paid by those by million-pound properties, but the figures from HM Revenue & Customs use the previous thresholds to make year-on-year comparisons easier.
The data shows that rising house prices and an increase in the number of sales pushed up the yield from SDLT by 16% to £7.5bn. Of this, just over £3bn was generated from sales in London, and almost £2bn from just 10 areas in and around the capital.
In the borough of Westminster alone, the Treasury made £487m from SDLT, representing 6% of total receipts from residential sales. Neighbouring Kensington & Chelsea came a close second, with £451m paid by purchasers. Outside of London, Elmbridge, which includes upmarket Esher, yielded £93m in duty.
Some areas in the top 10 are not normally considered upmarket, such as Lambeth, and Hammersmith. Each generated more than 1% of the total SDLT paid by residential buyers.
Although as a proportion of the total tax take the top 10 boroughs had fallen, from 28.3% in 2013-14, they yielded more than £100m more.
When combined, the SDLT yield from London and the south-east was more than £1bn higher than all of the other regions of the UK put together, making up 62% of the total.
The revenue taken from sales of homes costing £2m or more, or bought by companies, added up to £1.3bn.
HMRC said 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.”
The figures underline the growing divide between the property markets of London and the south-east, and the rest of the UK. The latest figures from Nationwide building society showed the annual rate of growth in the capital picked up over the summer, to drive the gap between average prices to its widest ever.
Separate price data from property firm Savills suggests that the top end of the market has been affected by Osborne’s stamp duty changes, with prices falls on the properties that faced the biggest increase in tax.
Properties costing £2m and more have seen price falls roughly in line with the increase in tax, it found. On homes costing £2m to £3m prices are down by 1.1%, on those costing £3m to £5m they are down by 2.4% and on £5m-plus properties prices have fallen by 4.7%. In contrast, between £500,000 and £1m where buyers face lower charges, Savills said prices were up by 3%.
Lucian Cook, head of residential research at Savills. said the prime London market “now looks fully taxed and buyers are slower to commit”.
He said: “For all but the very best in class properties, many buyers are expecting a discount on last year’s prices at least equivalent to the additional tax.
“By contrast, stamp duty changes have benefitted properties in lower tiers of the prime market, which have performed more strongly.”
