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Exclusive houses affected by duty

STAMP duty rises have affected the sales of some of Portsmouth’s most exclusive properties, according to an expert.

Matthew Pryke, chief executive of the Fine & Country estate agency in Drayton, said the government’s decision to put stamp duty on homes worth more than £2m up to seven per cent in the spring had depressed the market in luxury homes.

Most notably in Portsmouth, the £2.5m penthouse of No1 Gunwharf Quays – the lipstick tower – has yet to sell.

It’s thought there are more than 80,000 homes in the UK over the £2m threshold, including hundreds in and around Portsmouth, with the rise adding an extra £40,000 to the cost of buying a £2m property – bringing the total tax bill to £140,000.

There are 118 multi-millionaires living in Hampshire.

Matthew said: ‘The impact has been bigger in the country than in the prime London market, which is mainly internationally driven.

‘It’s difficult to address stamp duty directly because volume in the market has generally declined in that sector.

‘If you look at the latest Land Registry statistics over the last couple of years the market has declined around 50 per cent, even if you are being generous.

‘I don’t think the introduction of a higher rate of stamp duty was a surprise – the property industry is used to being heavily taxed.

‘But I think there was exasperation at a time when the economic picture was more difficult than it has been for a number of years.’

According to a recent survey of 1,000 millionaires and multi-millionaires by investment experts Skandia, a quarter of affluent individuals in the UK would avoid buying properties in the £2m-plus bracket.

The Millionaire Monitor report also found that a further 11.4 per cent of the super-rich intend to sell any properties they own with a value of more than £2m.

Matthew added that it was vital the government got banks lending to people looking for mortgages in order to stimulate the market.

 

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