The Treasury’s overhaul of the Stamp Duty system at the end of 2014 contributed to sales of ‘premium London homes’ collapsing by nearly two thirds last year, according to estate agent Douglas & Gordon.

New figures released by the firm reveal sales volumes of what it classifies as ‘premium London homes’ – houses and flats in London selling for £2m and above – declined by 64% in the last nine months of 2015 against the same period in 2013.

While the Chancellor’s unexpected changes from the old ‘step’ based structure to a tiered one reduced the Stamp Duty Land Tax burden for properties sold between £500,001 and £937,000, the introduction of a 12% levy on properties valued above £1.5m has had a significant impact on sales.

The 64% drop in sales volumes will have reduced the Treasury’s expected revenues from SDLT, and Douglas & Gordon is urging it to consider a reduction in the top rate of SDLT in 2016.

Sales values were also hit in the capital over the course of 2015.

‘Prime’ postcodes, defined by the firm as the area between Notting Hill and Chelsea, saw property sales values decline 1.4% year-on-year overall in 2015.

Executive director Ed Mead said: “The significant drop in sales of £2m+ properties during 2015 shows the profound impact of the SDLT changes.

“Tax revenues will have fallen sharply as a result, so we would urge the government to consider lowering the higher SDLT rates.

“Looking ahead, we are expecting the market to be split around the £1.5m mark.

“Property worth up to £1.5m could grow in value by as much as 5%, but owners of any property worth more than £1.5m can expect a static year.”