Is The Prestige Of A Million Pound Home Worth The Stamp Duty?

The British have always been snobby about postcodes, but on the 6th April this year the stamp duty on homes over £1million will increase from 4% to 5%. This will create a new class of super-properties in this country.You may think that this will only affect the super rich but this is not the case, million pound homes are not as rare as you might think. People think of one million pounds homes and think of stately homes in the countryside, however it may also be a two bedroom flat in a major city nowadays. Accordingto the Halifax there are now 170,000 homes valued above £1million in England and Wales. Sales of these homes are soaring, in 2005 1,412 sales were for £1million homes. This soared 111% to 2,982 in 2010. LloydsTSB say that there are over 200 streets in the UK where homes average £1million on them. However suffice to say only two of the top twenty are outside Greater London.

However the Treasury are looking at bringing in an extra £10,000 for these homes on each sale. What this may indicate is a drop in property prices, for example a house which is thought to be around £1,025million could be dropped to £995,000. Others may try to rush sales before 5thApril to avoid the increase. Even Land Registry figures show that £1million properties are in fact on the increase, betwee
September 2009 and September 2010 these properties in England and Wales increased from 552 to 686. The reason behind this surge seems to be buyers wanting to acquire substantial family homes before the increase and sellers acting on this interest by putting their houses on the market.

These homes are in the minority though even though they are increasing in number. A £1million property is still six times the average house price in the UK which stands at a more modest £168,733. This increase in stamp duty will only affect a small percentage of house sales.
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