Budget 2012: Stamp duty increase could slow down property market, warns estate agents

National estate agents have warned that a stamp duty increase on �2 million homes could hit all homeowners and buyers by triggering a slowdown in the thriving area of the property market.

Chancellor George Osborne announced a stamp duty rate of 7pc on homes costing �2 million or more from midnight tonight, which will mostly affect buyers in London, an area which has been key in supporting the market by recording consistent price growth due to strong overseas buyer interest.

Estate agents said the Chancellor risks 'killing the goose that lays the golden egg' at a time when much of the housing market remains flat elsewhere.

The Chancellor said it is 'fair when money is tight, and so many families could do with help, that those buying the most expensive homes contribute more'.

The National Association of Estate Agents (NAEA) said the Government had missed an opportunity to completely overhaul the 'outdated' stamp duty system, a tax which is seen as causing distortions in the market.

NAEA president Wendy Evans-Scott said: 'To reinvigorate this struggling market will require specific stimulus across the entire housing spectrum to help people buy and sell homes, not further penalties on those able to do so.'

Former NAEA president Trevor Kent said every homeowner would be hit by the new top-end tax, with 70% of first-time buyers relying on the progression of a 'chain' of sales.