The London estate agency Benham and Reeves have carried out an analysis of the average SDLT bill across the UK over the last 25 years and found that the average bill is 490% higher than it was in 1997. This is an increase (when disregarding the immediate and short term policy shifts around the 2009 financial crisis and Covid) of 8.4% per year on average.
This was calculated by taking the average house price at the time and working out what SDLT would have been payable on it at that time. This is not a perfect metric for calculating exactly how much SDLT has increased on purchases across all properties but, that being said, it is effective in showing how the increase in property prices in England over the last 25 years has simultaneously led to an increase in the tax payable when purchasing property. The amount of tax you would pay on a property in London if you bought it, even just 10 years ago, is potentially much lower than if you were purchasing the exact same property today.
The government lowering the tax is not looking probable however as SDLT is a big income stream for them and, given the financial strains being caused by the furlough scheme, they need all the money they can get. The recent SDLT holiday was extremely successful in prompting demand in the property market when needed but, the market is remaining buoyant despite its end. Savills have said that London super-prime property sales (£5,000,000+) are currently running 75% above the pre-pandemic level; there seems to be no slump in demand incentivising a reduction in SDLT rates to stimulate demand.
Lower property values would also reduce the tax payable but this is not desirable at all for most purchasers. Purchasers would be potentially stuck with mortgage repayments on assets worth less than what they paid for them, many people would be losing money (potentially significant amounts) on their property and a serious property market crash would have many other extremely negative consequences for people more widely.
You can take advice about how to best manage SDLT on property purchases but, while the property market remains vibrant and the government has no incentive to reduce its tax intake, we are unlikely to see SDLT rates lowering. We may therefore see SDLT payable on purchases potentially increasing further if property prices continue to rise in line with the precedent set in the last 25 years.