Based on the back-of-a- match-box-calculation, I estimate that the combined Local Authorities of Kensington and Chelsea, and Westminster account for about 0.5% of the property transactions (in terms of number of properties sold) but a whopping 15% of the residential stamp duty land tax take in the UK.
Such high transaction taxes will certainly inhibit flow – and that is exactly what we are seeing. Many home moves are local moves (even though the movers might be of international origin), and may have bought their property some time ago. Purchase taxes are now so high (a combination of high prices and high transaction tax rates) that fewer moves will happen. Fewer moves is a bad thing from many perspectives, but especially:
Good overall economics are driven and supported by healthy flows and certainly not by inhibiting them. These disproportionate flow-inhibiting property taxes need a rethink.