Speculation about property tax changes in the upcoming budget is fueling uncertainty across much of the market, Rightmove data shows.
Research has found that movers prefer to pay stamp duty in instalments, while a poll of estate agents also suggested that paying in installments would be a better change than passing the payment on to the seller.
Less than a third (30%) of homes for sale in England cost more than £500,000 and are subject to the proposed new annual property tax, which would replace stamp duty.
Figures show that more than half (59%) of homes in London are asking for more than £500,000 and will be subject to a rumored annual property tax if they enter, compared with just 8% in the North East.
Rightmove said 19% of property sales agreed in England so far this year were for homes worth over £500,000, but this varied by region.
More than half (52%) of agreed property sales in London have been for more than £500,000 so far this year, while in the North East only 4% of agreed property sales have been for more than £500,000 so far this year.
mansion tax
Meanwhile, Rightmove has seen a 13% year-on-year fall in sales of homes above £2m, which may be subject to mansion tax.
Figures show that agreed sales of homes priced between £500,000 and £2 million, affected by potential UK stamp duty changes or the rumored capital gains tax, fell by 8% year-on-year.
The sub-£500,000 market was less affected, with sales down just 4% in the same period last year.
Rightmove says this mass-market sector is likely to be rattled by general budget constraints rather than specific policy rumors.
Less than 0.5% of all house sales agreed this year were for properties with asking prices above £2 million. Overall, around 1% of homes for sale cost more than £2 million.
Colleen Babcock, property expert at Rightmove, said: “Rumors about the content of the upcoming budget are affecting the market as we see more hesitation in sales activity, particularly at the top end of the market, which has been the focus of most discussions.”
“While there is widespread unease about how the budget may impact personal finances, most moves will not be affected by the rumored property tax changes.”
“However, we’ve also seen uncertainty around the budget dent the confidence of some would-be movers and I think most are now fed up with the rumours, and just want to see how their finances will be affected.”
Last week, Rightmove revealed that nearly one in five potential movers had put their plans on hold while they awaited the budget outcome.
A Rightmove survey of 10,000 potential movers found 17 per cent had paused their plans due to uncertainty over property tax changes to be announced next week.
