New research by central London estate agency, Bective, has found that the prime market accounted for 15% of the total saving seen as a result of the tax reprieve.
Between 8th July 2020 and 30th September this year, a total of 10,220 transactions completed at £1m or above in the prime London market - 11.8% of total London transactions. While this may only account for a small proportion of wider market activity, London’s prime homebuyers still saved £154m in stamp duty equating to 15% of the total saving seen within the capital.
The core market (£1m to £3m)
The core market of purchases between £1m to £3m saw the largest level of market activity, with 9,246 property sales accounting for 10.7% of total London market transactions during the stamp duty holiday.
The £139.3m saved in stamp duty by homebuyers at this level of the prime market also accounted for 13.7% of the total savings seen across London. Homebuyers in Wandsworth enjoyed the largest savings (£16.5m), followed by Richmond (£11.6m) and Hammersmith and Fulham (£9.6m).
The mid-prime market (£3m+ to £5m)
The benefit of the stamp duty holiday was predictably more muted at London’s higher market tiers due to a lower volume of transactions. Across the mid-prime market, 634 transactions were completed, 0.7% of the London total.
The stamp duty saving of £9,552,500 accounted for just 0.9% of the London total, with Kensington and Chelsea ranking top with a saving of £2.3m, followed by Westminster (£2.1m) and Camden (£952,500).
The prime market (£5m+)
340 property sales were recorded at London’s very top tier during the stamp duty holiday, 0.4% of total market activity. These homebuyers pocketed a saving of £5,1m, 0.5% of the total stamp duty saving seen across the London market. Again, Kensington (£2.1m), Westminster (£1.4m) and Camden (£605,000) were the boroughs where homebuyers secured the largest saving.
Craig Tonkin, Bective’s Head of Sales, commented: “Despite the London market remaining largely placid in comparison to other areas of the UK during the stamp duty holiday, the higher price of climbing the ladder still saw the region’s homebuyers pocket the second-largest saving.
"There’s no doubt that a stamp duty free purchase was less of a motivation for the capital’s high-end homebuyers, but that’s not to say it wasn’t welcome and £154 million is not to be sniffed in any circles.
"It’s also fair to say that the stamp duty saving seen within the prime market may have been far higher if it wasn’t for ongoing Covid restrictions preventing many foreign buyers from transacting.
"In fact, as these restrictions were eased, we saw a far higher level of activity take place during the second phase of the holiday. Of course, by this point, the holiday threshold had been reduced to just £250,000 and so the savings made were fairly insignificant when viewed in the context of the holiday in its entirety.”
