The FINANCIAL -- Knight Frank residential estate agents completed on £333m of transactions in the 3 weeks leading up to the 5th April 2011, compared to £74m in the same period of 2010.
Liam Bailey, head of residential research at Knight Frank, comments: "This 350% increase is reflective of the huge rush to transact prior to the introduction of the new 5% £1m+ stamp duty rate."
Rupert Sweeting, head of country department at Knight Frank, comments: "We saw an unprecedented rise in the number of exchanges and completions before the end of the 2010/11 tax year, which was solely down to buyers keen to avoid paying an extra 1% in stamp duty. This is entirely understandable, as on a £3m purchase a buyer saves £30,000.
“We even had buyers completing before April 5th and, under a rental/licence agreement, the vendors were allowed to stay living in the property to give them time to find a new house. In one case, this period is a year!
“Going forward buyers have accepted that, in the grand scheme, it is an amount that they can and will swallow. It would have caused a lot more distress had the £1m stamp duty been bumped up by 3% or more. Given the stamp duty on a £3m home purchase is now £150,000, I imagine that stamp duty avoidance schemes will become more popular, as buyers try to avoid paying such a significant amount to the government.”
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