London estate agents reported a deluge of high-end property deals on Wednesday night as wealthy buyers scrambled to avoid higher rates of stamp duty coming into force within hours of the chancellor’s autumn statement.
Minutes after George Osborne announced an overhaul of the stamp duty system which will entail the wealthiest 2% of home buyers paying more of the tax, London’s high-end estate agents were besieged by calls to complete deals ahead of the midnight deadline.
“It was incredible, absolutely mad,” said Giles Milner, marketing director at the estate agency Chestertons. “Immediately the phones were ringing off the hook. There was a lot of confusion.”
Gary Hersham, managing director of Beauchamp Estates, said his firm exchanged contracts worth £100m on Wednesday. “The solicitors had to put themselves out. One deal went through at 10 minutes to midnight.”
Frantic estate agents told buyers and sellers to exchange contracts with just a £1 deposit, while lawyers spinned through their desktop files to call clients as far away as New York and India.
One buyer raced to his lawyer’s office and was able to save £363,750 by speeding up the purchase of a £10m home in Kensington, London.
But the biggest single deal in the London area, as reported by the Evening Standard, was a £30m house purchase in Surrey that exchanged at 11.45pm saving more than £1.4m.
Not every deal came together. Becky Fatemi, managing director at Rokstone estate agents, saw a client fail to complete the purchase of a £7.5m flat in Knightsbridge, London, and so face paying an extra £288,750 in stamp duty. “You are swallowing a bitter pill and you are going to have indigestion for a while,” she said.
A Russian couple pulled out of buying a Mayfair flat, because they thought the new rules would reduce property prices. “But they can wait because they were not planning to live there,” said Fatemi. “It was just somewhere to put [their] money investment-wise.”
About 55% of buyers in Kensington and Chelsea will pay more stamp duty on property following the law changes; higher bills will follow for 40% of buyers in Westminster, and 27% of those buying in Camden, finds research by Hometrack.
Fatemi said the changes would cool the market for £1m plus homes by forcing sellers to drop their prices.
David Adams, managing director at John Taylor estate agents, described the government plan as “soaking the rich” and said it now made no sense for buyers of prime property to move. “It is considerably cheaper to move into a hotel [and] completely renovate or extend what you already have to meet your requirements.”
