The Prime London market accounted for 12% of England’s stamp duty receipts in 2020 despite accounting for just 0.1% of transactions, according to research from Enness Global Mortgages.
Indeed, the total stamp duty paid across England during the year reached £2.9bn, of which £368.6m was from purchases above £3m in London.
The stamp duty holiday meant that buyers saved £1.2bn across England, while £6.1m was saved on prime purchases due to the tax relief.
Islay Robinson, chief executive of Enness Global Mortgages, said: “While stamp duty is often considered a financial barrier to buying for the average homeowner, the sums paid via the prime market are far more substantial.
“However, stamp duty is just one piece of the puzzle when buying a property in the UK. Any discount negotiated, the potential to add value, finance costs and currency considerations all need to be weighed up to determine the true value of a transaction. Looking at stamp duty in isolation won’t provide an accurate indicator of the additional costs incurred when buying.
“Of course, those transacting at the very top-end are far better placed to stomach these costs and so a stamp duty saving hasn’t been a driving factor with regard to transacting, nor has it caused the mad panic to complete that we’ve seen across the regular market.
“The prime market is arguably better off as a result and we’ve seen a quality over quantity approach continue to improve market health across the top price thresholds, as confidence returns following a year of pandemic uncertainty.”
Property purchases made by foreign residents, who make up a sizable proportion of prime buyers, are now subject to a 2% stamp duty surcharge.
Robinson added: “Of course, the introduction of a further 2% cent stamp duty penalty for foreign buyers won’t do much to help this returning health, with high-end homebuyers from outside of the UK looking at an average cost of half a million pounds owed in stamp duty alone as of April.
“That said, a prime London home remains one of the must-haves on any notable international property portfolio and so this increase will be viewed as a small price to pay for the serious investor.”