Most residential properties in London have seen a decline in value over the past year, intensifying calls for adjustments to stamp duty tax policies. According to recent data from property portal Zoopla, approximately 85% of homes in London and the South East experienced a drop in value during this period, a stark contrast to the national average where only 35% of properties lost value.

The downturn in the capital’s housing market has been largely attributed to rising mortgage rates and diminished buyer demand, factors that investors and analysts link in part to geopolitical tensions stemming from the ongoing conflict in Iran. These conditions have led to an average decrease of £5,400 in the value of London homes compared to the previous year.

In contrast, some regions outside the capital are experiencing growth; for example, properties in the North West of England have increased in value by an average of £6,600 over the same timeframe. This regional disparity highlights the uneven impact of economic and market forces across the UK housing sector.

In response to the market pressures, industry voices, including major homebuilders Berkeley, Bellway, and Barratt Redrow, are urging the government to consider more substantial tax relief measures. These builders advocate for either the abolition of stamp duty for first-time buyers or at least an extension of the current 2% stamp duty threshold. Zoopla estimates that extending this band could result in savings of up to £7,500 for individuals moving homes within London.

Housing minister John Healey has yet to comment on the proposals. However, the growing number of homeowners facing declining asset values and the calls for policy intervention underscore the challenges the London market currently faces amid broader economic uncertainties.