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In Focus - Research

SDLT Change Impacts

Hamptons International conducted a survey* in August 2012 in order to understand the impacts
of SDLT changes on the buying decisions of our clients. 45 per cent were already property
owners in London, but many also held property in a range of other global locations such as New York, Hong Kong, Monaco and Switzerland.

Fully 87.5 per cent of respondents were dissuaded to some extent from making a property purchase as a direct consequence of the SDLT changes. This is despite only 37.5 per cent planning to use a corporate envelope, implying that half of all survey respondents consider the Government announcements to potentially have indirect personal impacts as a result of their own property purchases, despite not being targeted directly by the rule changes.

However, Government can take heart that the groups targeted by these changes have got the message. While more than three-quarters of respondents have or would have considered purchasing property through a corporate envelope prior to the SDLT change, only 10 per cent are still likely to do so.

Such a dramatic shift in buyer sentiment demonstrates that in one sense, the SDLT changes have been an effective tool for Government and may well be hailed by many as a success. Unfortunately, this has proven to be a narrow definition of success, as the resulting
indirect impacts on market activity could weigh much more heavily on the residential market as well as the related economic spin-off investment that these purchases would have released. This also runs contrary to the very strong economic growth agenda that Government has more recently adopted.

*Survey data is based on 40 respondents contacted directly through the Hamptons International client database of registered purchasers with a budget of at least £2 million pounds sterling.