London calling

Ricky Gervais recently put his stunning London house on the market for £7.7M – but sales of homes in the capital have plummeted nearly a quarter year-on-year.

According to the Land Registry, London saw a 23% decline in sales this year.

Across England and Wales 851 homes were sold for over £1million in January, a 19% fall compared with January last year, when 1,049 properties in this bracket were snapped up.

Stamp duty changes in December 2014 have made the tax more expensive for some buyers purchasing high-end homes.

While the tax has become cheaper for the majority of buyers liable to pay it, the tipping point comes when homes are worth more than £937,500.

Michael Labrum, from Labrums Solicitors, said: “The amount of tax raised by HMRC by reforming the old stamp duty to create SDLT has increased so dramatically that it is now a major source of revenue from residential property.

“It could be considered to be an unfair tax on those who happen to live and work where property is most expensive.

“However, there is evidence that because fewer people are moving at the top end of the market there is a knock on effect which means there are fewer houses available at the other end of the market.

“There is very little that can be done to reduce the tax unless one of the SDLT mitigation schemes are used.

“Such schemes are heavily attacked by HMRC and are not for the faint hearted.”

The figures show that house prices in Chelsea and Kensington, where the average property is worth £1.29 million, have shown the slowest annual growth of all the London boroughs, recording a 5.2 per cent upswing.

Less than one in four homes sold in March went to first-time buyers, according to the National Association of Estate Agents (NAEA).