colefaxColefax Group PLC says the introduction of a 12 per cent stamp duty rate on high value homes is affecting demand for luxury furnishings.

The group — owner of the Colefax and Fowler, Cowtan & Tout, Jane Churchill, Manuel Canovas and Larsen furnishing fabrics and wallpaper brands — said UK sales had been impacted.

Half year UK fabric division sales were down by 4 per cent with trading described as more challenging than it expected at the start of the year.

“We believe that the high end housing market is being affected by the substantial increase in stamp duty in December 2014, with a rate of 12 per cent on values in excess of £1.5m,” the group said as its released its interim results.

“This has substantially reduced the number of high end housing transactions which we have always regarded as a key driver of sales.”

Group pre-tax profits increased 13 per cent to £3.3m on global  revenues up 1.5 per cent to £38m for the six months to end October. Net cash increased to £7.8m (2014: £4.7m).

Chairman David Green said: “The recent trends in our two major markets, the US and the UK, suggest we are entering a period of more challenging market conditions. Together with the turbulence in global markets that has marked the start of 2016, we are cautious about prospects for the remainder of the year.”

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