High stamp duty costs are contributing to the continued weakness of London’s housing market and should be reviewed at the Autumn Budget, according to RSM UK.
The call comes after official figures show average London house prices fell 3.3% in the year to July, marking the 11th consecutive month of annual declines.
Across the UK, average prices increased by 1.4% annually to £273,000, but growth slowed for the third consecutive month.
On a seasonally adjusted basis, UK prices fell 0.2% between June and July.
LONDON PRESSURE
Stacy Eden (main picture, inset), National Head of Real Estate at RSM UK, says: “July’s house price index highlights that house prices have at best flatlined on a national level, with continued disparities between the North and the South.
“London remains particularly impacted by the penal rates of Stamp Duty Land Tax and high mortgage rates, with the region seeing a 3.3% annual decline in average house prices.”
The regional divide remains substantial. While London prices fell 3.3%, the North East recorded the strongest annual increase in England at 4.9%.
RSM also points to weaker mortgage activity, with official figures showing mortgage approvals for house purchases fell to 56,100 in July, below the 60,800 average recorded over the previous six months.
TAX REFORM
Eden is calling on the government to use the Autumn Budget to review housing taxation, including SDLT.
She says: “We’d like to see the government use the budget to stimulate demand. A reform of SDLT would be a welcome measure, to help reduce penal rates at the top end of the market.”
RSM is also calling for the reintroduction of Multiple Dwellings Relief, which was abolished in 2024, to support investment and housing delivery.
The firm warns that development viability is also being squeezed by higher construction costs and the introduction of the Building Safety Levy.
Its intervention comes as CPI inflation increased from 2.9% to 3.1% in August, adding another source of uncertainty for the housing and mortgage markets.
