The March 2012 Budget made two proposals aimed at slowing the enormous gap between Prime London property prices and the rest of the UK. The first was an increase in Stamp Duty Land Tax (SDLT) on properties over £2m in value, from 5 to 7%. The second was a 15% SDLT levy on properties over £2m transferred to a 'non-natural person' (i.e. a corporate vehicle). The latter properties (for non-naturals) would also be subject to Capital Gains Tax upon sale, where previously the company would be exempt, plus an annual charge for properties valued at more than £2m, ranging from £15,000 to £140,000, depending on the value of the property.

So, if most of the tax changes are to non-natural persons, what percentage of the London market are actually non-natural buyers? Well, unsurprisingly, the number of non-naturals has dropped significantly, with the FT reporting that, 'although 30% of prime central London homes over £2m were purchased by 'non-natural persons' in 2011, this figure dropped to a mere 3% in 2012.'

It appears that over the past year, many people have transferred their properties from companies into other structures or into private ownership in anticipation of these new tax charges.

Well intentioned as these measures may have been, they have had little effect on Prime London property prices and as Savills pointed out at the time of the tax change announcement, 'a 7% stamp duty charge (for individuals) does not cause London to be substantially out of kilter with other global cities. Before the Budget, London was less expensive than Paris for property acquisition, now it is marginally more expensive.'