London luxury house sales hit by tax change Sales of luxury homes in London have slowed down dramatically since March, raising concerns about the merits of the government's tough approach to stamp duty in the March budget. New Land Registry figures reveal that sales of houses worth more than £2m fell almost a third during the three months to October, compared with a year earlier. The drop-off comes six months after George Osborne, chancellor, raised stamp duty on sales of houses worth £2m and above from 5 to 7 per cent, and to 15 per cent on properties purchased through corporate vehicles. At the time of the March budget, the Treasury had hoped to reap an extra £150m from the changes. "Clearly, the tax changes have slammed the brakes on both the domestic and investment market," said Naomi Heaton, chief executive of London Central Portfolio, the residential investment group. According to Land Registry figures, there were 262 transactions of houses worth £2m and above in London during the third quarter of this year, compared with 370 deals in the same period a year earlier. The changes to property taxation, plus uncertainty over future measures that may be coming in the chancellor's autumn statement, are a deterrent for overseas buyers, who make up the bulk of transactions in the high end housing market centred around a handful of inner-London boroughs. Estate agents say many have stayed away from the market during the past six months, while buyers of less valuable homes have completed deals at just under £2m so as to avoid incurring the higher tax. "I was talking to a client earlier this month and he said the message from the UK government to overseas buyers is not a welcoming one," said Charles McDowell, a London estate agent specialising in high-end property. He added that the drop-off in transactions would eventually drag prices lower. For the best quality stuff, there will always be a market, but the mediocre stock that is being overpriced will have to come down. In spite of the slowdown in the high end market, the most expensive properties in London continue to attract widespread international interest. In September, a London mansion went on sale for £300m - the highest price ever sought for a private UK residence.