"Unless the tax is adjusted to account for regional differences, London is likely to face a significant impact with many more residents choosing to leave."
- Dave Sayce, co-founder & managing director of Compare My Move
According to recent reports, the UK Government is contemplating the replacement of stamp duty charges with a property tax aimed at those selling homes worth £500k or above, with standard stamp duty rates remaining for second homes.
This won’t affect the majority of homeowners, but given the average property sold price in London currently stands at just under £667k, this region will be significantly impacted.
According to data from Compare My Move, there has been a 5% increase in Londoners moving away from the capital since Q3 2024.
“Londoners have been finding it difficult to sell their homes for some time, with average selling prices falling year-on-year. Even so, the average price has not yet dropped below the proposed £500k threshold.
“If the new property tax is introduced and applied according to house prices, it will put further pressure on Londoners to reduce their asking prices. However, I don’t think cheaper properties will be enough to stop people from moving out of the capital when buying,” explained Dave Sayce, co-founder & managing director of Compare My Move.
He said: “Londoners may be discouraged from buying properties just below the threshold because of concerns that their home’s value will not rise enough to cover the tax when they come to sell. There could be a price gap between houses that are selling for under £500k and houses selling for way over.
“At this stage, it’s unclear whether the tax will apply only to the portion of a property’s value above £500k or to the full value. Once this is confirmed, we will be able to predict its impact more accurately.”
“Unless the tax is adjusted to account for regional differences, London is likely to face a significant impact with many more residents choosing to leave. I would expect the proportion of Londoners moving out to rise to over 40% once the tax is introduced, leaving sellers facing even greater difficulties,” Dave concluded.
