Changes to stamp duty have “failed miserably” and “killed” the central London property market, according to the chairman and founder of Redrow.
Steve Morgan said that the housebuilder had halted research into central London sites since the government’s stamp duty reforms just over a year ago.
The multi-millionaire’s comments followed research from property agent Knight Frank which showed stamp-duty takings from London – which accounts for nearly half of revenues – were down by £105 million to £2 billion during the first 10 months of last year.
Changes in December 2014 introduced a new banding system for the tax which put up the cost of stamp duty for anybody buying a house worth more than £937,500. The buyer of a £2 million home now pays tens of thousands in extra duty.
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 £1 million have been decimated by the quite frankly outrageous stamp-duty taxes which are probably the highest property taxes in the world.
“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?”
Redrow’s chief executive, John Tutte, added: “This is what happens when you hike takes up to the levels when they become extortionate. The market just reacts to it.”
The comments come despite the FTSE 250 firm unveiling a sparkling set of half-year results on Tuesday, clocking up a number of new records as revenue, profit and the order book all hit new highs.
Outside London the house builder’s average selling price increased by 11 per cent, and its private order book was up 51 per cent to £655m.
For expert advice on mortgages, and how to maximise your investments to take into account the changes in stamp duty, please contact the team at Birchwood today.