Thursday, 8 December 2016

Stamp duty take falls by up to £0.5 billion over the last six months!

Wow! 'Eh?' Wow!

In the six months following the Government's introduction of the new 3% Additional Rate Stamp Duty on second properties, compared with the same period last year, there has been:

A 75% reduction in sales above £10m. This represents a fall from 61 to just 15.

A 51% reduction in sales between £5m and £10m. This represents a fall from 201 to just 99.

A 36% reduction in sales between £2m and £5m. This a fall from 1473 to 947.

A 33% reduction in sales between £1m and £2m. This represents a fall from 7285 to 4913.

The reduction in activity above £5m in the last six months alone, means the Government has collected at best just half of the Stamp Duty it accrued over the same period last year (or £122m less), as this assumes the Additional Rate Stamp Duty (3%) was levied on all sales.

Yes, dear reader(s), it's the Thursday morning PR email, back by popular demand. And I'm a bit confused. 'Oh. Why, boss? It all seems clear.' I mean I overslept a bit, Voice. And I don't where I am yet. I haven't got myself together yet. Christ! Who am I? 'You're Michael Fowke, Mikey! The world's foremost financial shaman. Have you had your coffee?' Yes, yes. I've just finished my coffee. Where am I?!

In the aftermath of the UK's Brexit vote and following a steady stream of residential tax increases, just released statistics from HM Land Registry, analysed by London Central Portfolio (LCP), has shown an unprecedented decrease in top-end sales across England and Wales in the first half of this financial year 2016-17.

Oh God! Not Brexit again! Will the horror never end? 'What does Naomi Heaton say, boss?' Our Naomi? Well ...

Naomi Heaton, CEO of LCP comments: "As can be seen over the last 6 months, the market appears to have finally succumbed to the constant residential tax hits from the Government. Against a backdrop of uncertainty around Brexit and the direction of travel of the UK's economy, it seems that the introduction of ARSD has been one step to far for both domestic and international buyers. Developers have been particularly affected by the new landscape with only 9 properties sold above £5m, a staggering 83% fall compared with last year. With these top end sales typically off-setting the cost of providing more modest housing and essential cash-flow to reinvest into new development, the Chancellor may well struggle to deliver upon his new affordable housing targets as developers begin to face losses."

And there's loads more. I'm not going to quote all of it. There's this though - 'This though?' This, idiot! Naomi again -

"This slowdown in the luxury property market - a big contributor for the Exchequer and UK economy in general - is very concerning, particularly as the Government faces wider economic and financial instability in the face of Brexit. With an already increasing deficit to address and the Government's declared intent to increase tax revenues, these statistics should make some worrying reading for Chancellor Hammond. Having missed the opportunity to reconsider Osborne's strategy at the Autumn Statement, we hope the Government will now look to relax some of these measures before there are detrimental knock-on effects for developers, the Exchequers balance sheet and the wider UK economy."

Oh, and her conclusion -

Heaton concludes: "It is about time that the Government understands that the political posturing that has made foreign investment the scapegoat for our UK housing crisis is having an entirely negative impact. A contraction of the luxury market will not miraculously provide new homes for the domestic market. It will simply reduce tax take and damage the wider economy as affluent investors spend their money elsewhere. At a time when the Government is actively trying to encourage investment into the UK globally, it is counter-intuitive to restrict investor access to our top-end market. This makes the UK appear a less attractive place to do business in, with the concomitant economic downside which goes with it."

You see, reader(s)? It's the government. They never get anything right. 'And Labour are supporting the government now.' Ha! It's a joke, man. Just a bad joke. I'll have to vote for the Liberal Democrats next time. 'Christ! Are you sure, Mikey?' Ha! No, I'll be living in Malibu by 2020. Fuck it! Let's get out of this place! Who's coming with me?


Anything else? Well, the week is nearly over. I've got to write another conceptual, No. 471, then ... it's the weekend! 'Yippee! / Have you recorded those last two songs yet?' No. I tried last night. I'm getting closer. I mean, I got some "competent" recordings of one of the songs, but I want something great, you dig? 'Yeah. I dig big time. One of these days, you will be rockin' in the free world, boss. I can feel it in my water.' Thanks, man. I appreciate your support.