General election: Mansion tax `will force up prices in less wealthy areas?
Wed 06 May 2015
Investors will trigger a post-election house price boom as they trade down from central London addresses toescape the most punitive rates of mansion tax, it was forecast today.
Residential areas such as Battersea and Fulham will see values rise in the second half of the year as wealthybuyers shun areas such as Mayfair where the tax rates will be highest, according to agents Douglas & Gordon.
Executive director Ed Mead said: If you look at the lower bands I think most people will say, Well, its aninconvenience but I can just about live with that. But in the 5 million-plus level a lot of people will rotate out ofthat and look at investing in the lower mansion tax range instead. And some people living in 5 million-plushomes will have to sell because they wont be able to afford the mansion tax.
Labour has threatened a 3,000-a-year levy for homes worth between 2 million and 3 million and the Lib-Dems2,000 for homes worth between 2 million and 2.5 million.
Labour has not revealed the rates for properties worth more than 3 million but research by agents Savills hassuggested it would be at least 7,000, rising to 18,000 for homes worth more than 5 million. The Lib-Demshave already said their rate for homes worth between 4 million and 5 million would be 9,000 a year.
Mr Mead said the underlying attractions of London property to foreign investors will be undiminished whatever theoutcome of todays poll. Expect a market-driven price rally in the second half of 2015, he added.
However, according to research from rival agents Marsh & Parsons, the most prestigious central Londonneighbourhoods will go up in value most this year. Chief executive Peter Rollings said: The outer-prime darkhorses of Balham and Brook Green have been putting on the most astonishing performance recently.
But in the long run, the traditional property stalwarts of Kensington, Chelsea and Holland Park are proving theyhave the stamina to withstand a wider marketslowdown.