London’s high-end property market is facing uncertainty in the run up to the 2015 general election as the main parties set out plans to increase so-called “wealth taxes”, which might dissuade overseas investors from doing business in the capital.
The Conservatives plan to enforce Capital Gains Tax on overseas investors, while Labour and the Liberal Democrats say they will implement a so-called “mansion tax” on high end properties.
Some estate agents have warned that uncertainty over property taxes could stall growth in the capital and lead to fewer properties being built across the city.
According to estate agents Savills, a slow-down followed by a dip in property prices is expected in the months leading up to the election.
Speaking to the Telegraph, Savills’ head of UK residential research, Lucian Cook, said,
“The taxation of high-value homes will undoubtedly come under scrutiny yet again in the run-up to the election. Political rhetoric will generate uncertainty, which we expect to slow growth and could even trigger marginal price falls in 2015.”
House prices in Kensington and Chelsea, one of the key markets in London, were down two per cent in the month to October 2013. This follows a nearly 10 per cent rise in house prices in the borough over the preceding 12 months.
However, some commentators point out that property prices were stalling in the capital even before Chancellor George Osborne began taking aim at overseas property investors.
Property developers say that a large portion of investment in new homes in the capital comes from international investors, and if they are scared off by the prospect of additional taxes, new housing projects in the capital could be jeopardised.
Perhaps you are one of our landlord insurance customers with a view on this topic. Will talk of new “wealth taxes” dramatically affect the high end London property market? Is the topic being used for its political currency? As ever, leave your thoughts below.