London estate agency Chestertons revealed that the 2% increase on Stamp Duty for second homes announced as part of this week’s Autumn Budget triggered an immediate response from buyers who rushed to finalise their property purchases before midnight when the higher tax came into effect.
Any individual buying a second property will now pay 5% in Stamp Duty instead of the previous 3%.
And Robert Sturges, Regional Director for Central and Prime Central London at Chestertons, says that as soon as the Chancellor made the announcement, the agency swung into action.
HEAVEN AND EARTH
He says: “We moved heaven and earth to assist buyers of second homes that were in a position to finalise their purchases to exchange contracts before the midnight deadline.”
Chestertons was involved in over five rapid multi-million pound sales in Kensington, Hyde Park, Notting Hill and Chelsea.
In each scenario, the buyers were eager to speed up the process to exchange contracts within a matter of a few hours, thereby getting ahead of the almost immediate application of the higher rate of Stamp Duty.
TAKING RISKS
Sturges adds: “One of the buyers made the decision to go ahead without a survey on the basis that any minor remedial work would be far outweighed by the £65,000 additional Stamp Duty payment required.
“The property was a beautifully presented home in a recently constructed building, so the risk of significant issues from a survey was low.
“In another case, a seller and buyer agreed a lower deposit, just 1.5% rather than the usual 10%, in order to facilitate exchange of contracts.”
Looking ahead, Chestertons does not expect the Stamp Duty increase to have a drastic impact on buyers looking for a second home in London.
Sturges says: “Instead, many will review the financial implications and adapt their search criteria.”
