Comment: Stamp duty rises may be hitting more than just the property market

PUBLISHED: 16:14 21 December 2017 | UPDATED: 16:37 21 December 2017

The link between the residential property market, retail spending and the growth of the economy are indivisible, says Trevor

The link between the residential property market, retail spending and the growth of the economy are indivisible, says Trevor


Are the stamp duty hikes doing more harm to the UK economy than just strangling the residential property market, asks Glentree Estates director Trevor Abrahmsohn

We all know the reasons why the former Chancellor imposed those draconian hikes on stamp duty charges in the autumn Budget of 2014 and we can now see the full devastating and distorting effect it is having on the Residential Property Market, particularly in London.

Prices are down by 25 per cent and activity is down by 70 per cent and since transaction expenses are now playing such an important part in the mind-set of prospective buyers, in certain price ranges, there is absolute gridlock in sales, where sellers outnumber buyers by 10-1.

The uncertainty surrounding Brexit is not really a factor other than, paradoxically, doing some good for the higher price ranges with the drop in the rate of Sterling against other currencies, which is seducing a number of foreign buyers to the UK, particularly of late.

I agree, nobody is going to cry, nor should they, for the Russian oligarch who can’t sell his mansion in Belgravia for the price he wanted, but when you look at the wider effects on the UK economy, then the systemic damage that is being wrought, is much more evident and costly.

Let me explain - the intrinsic link between the residential property market, retail spending and the growth of the economy are indivisible.

When consumers feel that their properties are appreciating, they tend to go out and spend more and this is one of the main drivers of our economic growth.

It is therefore, unsurprising, that retail sales are substantially down, as is evident from the recent trading statements of some of our major PLC retailers and in the projected figures from the OBR (Office for Budget Responsibility) which have been marked down in the Budget from over 2 per cent last year, to 1.7 per cent this year. Predictably, the government is blaming this on the uncertainty of Brexit, when it may not be the case.

Analysts and even the Chancellor have been carefully watching the tax receipts from SDLT, to make sure that there is not a perceptible gap in revenue as a result of the higher charges. However, as I have always argued, even if the Treasury receipts are a similar scale, before as afterwards, the devastating and distorting effect of these charges, is having a greater effect, when you take the holistic view of the economy.

‘Since time immemorial’, the link between the Property Market and UK growth is all too evident, which is not the case for other European countries such as France or Germany.

Lest we forget, residential property is an alternative ‘asset class’ and a rich source of wealth to the many sociodemographic groups and where there is inflation in values, debt shrinks in relation to this, which means that ‘asset owners’ are better off.

The usual adage of ‘the rich get richer and the poor get poorer’ is not necessarily true, since ‘asset owners’ are getting richer in all sectors and ‘non-asset owners’ i.e. tenants, are getting poorer.

Although Ed Miliband tried to contradict ‘Archimedes Principle of Displacement’ in the run up to the General Election in 2015, believe it or not, he could not be more wrong since ‘when the tide comes in, it lifts boats of all sizes’ if you will forgive the metaphor.

The previous Tory administration under Cameron, clearly did not account for Brexit, as the UK Economy needs all the stimulants it can get, now that Quantitative Easing has been reined back and the interest rate trend is moving north, to act as a brake against inflation.

With the shrinking UK economy, various tax receipts will inevitably drop and it will be even more difficult to continue the present Chancellor’s budget deficit reducing aspirations, which has been fundamental to the Tory tax discipline.

Very regrettably, the tourniquet has been fastened and then tightened mercilessly around ‘the Golden Goose’s neck’ and why should we then be surprised, that there are less ‘golden eggs’ for us to harvest ... duuuuh!


Property search

e.g. Oxford or NW3
Powered by Zoopla

Other Hampstead and Highgate property news

5 issues landlords should consider in 2018

2017 saw a number of changes made to regulations governing the private rented sector and a record number of government consultations held in relation to letting in the UK, meaning there is plenty for landlords to consider and act upon in the new year.

Three great properties for sale in Little Venice

Grand stucco-fronted houses and large Georgian and Victorian brick constructions line the wide streets of Little Venice, whilst charming mews houses can be found on the cobbled street of Bristol Gardens. For the ultimate canalside location nothing can beat a narrow boat.

Little Venice area guide: Canalside lifestyle, cafés and bars, shopping, property and more

Your guide to all the things to do in Little Venice, including the best restaurants, shops, pubs, schools and things to do by the canal. PLUS our guide to property in the area

New two and three-bedroom homes in Hampstead reflect Arts and Craft architecture of area

Thirty nine new two and three-bedroom homes, influenced by the Arts and Crafts architecture of the area, have been launched in Hampstead.

Comment: How to set the asking price for your property

Simon Gerrard, MD of north London estate agents, Martyn Gerrard, offers advice on pricing your house to achieve the best possible result

What you should know about inheriting property

There’s much to consider when inheriting property, writes Fiona Brandhorst

Camden area guide: Market, food & drink, entertainment, property and more

Your guide to all the things to do in Camden Town, including the best restaurants, shops, pubs, live music venues and Camden Lock Market. PLUS our guide to property in the area

Home of the week: Regency villa in picturesque Downshire Hill

Situated on the prized and picturesque Downshire Hill, this early 19th century Grade II-listed Regency villa is on the preferred south side of the road.

Comment: They call me the House Whisperer

Trevor Abrahmsohn, managing director of north London agents, Glentree Estates, writes about his special skills for closing a deal, which, he says, include “psychotherapy, extreme cajoling and applied salesmanship”. We’re intrigued...

How best to clear your unwanted junk

Richard Burr reveals how to clear your clutter.

Do it yourself! Great short and part-time courses in DIY, interior design, carpentry and more

With a whole new year stretching ahead of you, instead of making resolutions and not sticking to them, why not pick a fresh interest which will not only hold your attention, stimulate your creativity and keep your mind active, but improve your home, too.

What’s in store for the housing market in 2018 and how it will affect house prices, mortgages and first-time buyers

If you’re considering whether to move home this year, Ella Walker looks at potentially the main influences on house prices in London and further afield, and how they may affect buying and selling.

10 gardening trends set to blossom in 2018

These are the themes and plants predicted to dominate in the coming 12 months, writes Hannah Stephenson.

How to brick up a window like a pro

Being a brickie isn’t easy. Richard Burr reveals how to master the moves.

It’s time to get your home back in order after the festive season, but where do you dispose of your Christmas tree? We offer 3 recycling tips.

Festive season is in full flow, but soon it will be time to think about ditching the decorations and making more space for your home once again. But how should you dispose of your tree?

Comment: Stamp duty rises may be hitting more than just the property market

Are the stamp duty hikes doing more harm to the UK economy than just strangling the residential property market, asks Glentree Estates director Trevor Abrahmsohn

Landlord offers two-bedroom flat in King’s Cross to homeless for free over Christmas

Laurence Lameche, who now runs a property business but was formerly homeless himself, is looking for a single person, couple or family in need of somewhere to stay during the festive period

For sale: Highgate Mansion formerly home to Nobel Prize winner

An exceptionally restored Victorian mansion that was formerly home to a Nobel Prize winner is now on the market on Bishopswood Road, Highgate.

London design agency Studio Carver’s extensions in Belsize Park shortlisted for architecture awards

When Keith Carver, founder of design and architecture practice Studio Carver, was asked by a couple to help them realise a dream project for their retirement, he immediately saw the potential.

Average asking prices rise 19.2 per cent across borough of Camden

The borough of Camden bucked a trend of falling house prices across London in 2017, according to new statistics published by Rightmove.

How to insulate your own loft

Cold, isn’t it? The days have got shorter, summer feels a long way away, the sofa seems comfier - and the last thing you want to do is go outside and do more DIY (unless you absolutely have to).

Home of the week: Arts and Crafts style house in Hampstead

A spectacular interior designed Arts & Crafts style house, built circa 1905 for the artist Samuel Fry, a Royal Academy exhibitor

Alexandra Palace area guide: the hills, the houses and hunting for a bargain

Your guide to things to do in Alexandra Palace, including the best shops, cafes, restaurants and schools. PLUS our guide to property in N22

Comment: What’s in store for 2018?

Trevor Abrahmsohn, managing director of estate agents, Glentree International, offers his predictions for 2018 on everything from property to the World Cup

Primrose Hill family selling historic home after more than 60 Christmases

Originally constructed by renowned Victorian builder William Willett, the seven bedroom house, in Primrose Hill, is now on the market for £15,000,000

North London extensions shortlisted for top design award

Two north London extensions have been shortlisted as among London’s best and most innovative home improvements.

Three table setting themes to inspire you this Christmas

Gabrielle Fagan reveals how to create a Christmas table that’s a feast for the eyes

How to grow your own garlic

If you’re finding that shop-bought garlic doesn’t have the intense flavour you require, then it’s time to start growing your own, which will give you more choice and more flavour.

London house prices now a record 14.5 times higher than average income, figures show

Average house prices reached £496,000 and average earnings were £34,200 in London this year, yet a north London agent says the comparison is not an accurate representation of the capital’s property market

Decor experts Rockett St George reveal their recipe for stunning style

Jane Rockett Lucy St George share their vision for imaginative, inviting interiors with Gabrielle Fagan

Newsletter Sign Up

Sign up to the following newsletters:

Sign up to receive our regular email newsletter

2018 © Archant Community Media Ltd

Terms and conditions | Cookie policy | Jobs at Archant