The survey cited doesn't mention the Mansion tax, so the Times points to a 'general feeling'
A spectre is haunting London – the spectre of Labour’s Mansion tax. Fears over the proposed charge on £2million homes are driving down house prices in London, despite a rise in prices in the rest of the country. The Times has the scoop: ‘Mansion tax fears depress house prices across London’.
If we leave aside for a moment whether house prices in London couldn’t do with a bit of depression, what evidence is there that ‘Mansion tax-dread’ is the cause of this drop in prices?
Well, there isn’t any – at least, not in the Times story, which cites a survey by the Royal Institution of Chartered Surveyors (RICS) for February, released today, which found a rise in house prices nationally, and a price decrease in London.
Trouble is, the survey doesn’t mention the Mansion tax, either in its sample of responses or in it’s analysis. Neither does the RISC’s press release on its website. In fact, the only link made between lower prices in London and the Labour policy is in the Times piece itself:
“London homeowners are wary about moving because of extra fees and taxes they might face from a new government in May. Labour has already promised a tax on properties worth more than £2million, and there is a general feeling that politicians will step up their efforts to tap into property wealth for money to fund public spending.”
Ah yes, a “general feeling”. No evidence is provided for this assertion, or for “wariness” among homeowners.
Of the scores of RICS members quoted in the survey, which are only a sample of the 324 responses collected, just two mention the Mansion tax, and only one of these is based in London.
And with house prices rising nationally, and Labour’s policy intended for the whole country, why is this fear of the Mansion tax only gripping London?
Besides all of that, a 28 per cent drop in the ludicrously high price of a home in London will be music to the ears of many potential buyers. A report from the charity Shelter recently found the average house price in London is now almost 15 times the average wage.
Plus the Mansion tax will only affect homes worth over £2million – less than 0.5 per cent of all homes in the country – and only when the owners earn more than £42,000 a year.
So if the Times is going to claim fears about Labour’s Mansion tax are driving down house prices in London, their evidence ought to be more than a “feeling”.
Adam Barnett is a staff writer at Left Foot Forward. Follow him on Twitter
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64 Responses to “Media Watch: Times blames Mansion tax fears for London house price drop. But where’s the evidence?”
FairHomeTax Campaign
“A future Labour government would never “in a month of Sundays” raise
the £1.2bn it hopes to generate from the mansion tax to be levied on
properties worth more than £2m”, Lord Mandelson has said.
For the other side of the story – see @fairhometaxcampaign:disqus
machine_elf
I don’t understand the problem. Most of these homes have increased in value through no effort on the part of the owners. They will have huge unearned untaxed profits from their homes if they need to sell. They seem to be against any sort of mansion or property tax but have no problem taking the free profit that their house and other peoples taxes have made for them.
FairHomeTax Campaign
“What we need is what I think the #Liberal
Democrats are proposing and that is the introduction of further bands
that relate to different values of property within the council tax
system. That’s what I would like to see. It will take longer to
introduce, that’s true, but it will be more effective and efficient in
the longer term than simply clobbering people with a rather sort of
crude short term #mansion tax.”
Mandelson is the latest senior Labour figure to criticise the party’s plan to impose a tax on #properties
worth more than £2m to help raise £1.2bn towards the £2.5bn costs of a
new “Time to Care” NHS fund. This is designed to support 20,000 more
nurses, 8,000 more GPs and 5,000 more care workers by 2020.
@FairHomeTax have been saying this all along…
JamesTennant
I can’t argue with you re the merits of otherwise of the mansion tax. But have you considered the impact on the population of vast house price inflation? Relative to that a mansion tax is a drop in the ocean.
The astronomic rises we have seen since 1997 are largely driven by cheaper and increased credit availability. The result is a major wealth transfer from young to old and those with assets and a requirement to lease our housing stock at great expense from the banks.
machine_elf
Most people did not buy £2 million pound houses, they were just lucky to be born at the right time and see their homes rocket in value. So they have no problem taking an unearned, untaxed profit if they sell the property but have a problem with paying a small percentage on the huge unearned increase. Why is it better to tax someone earning £30k per year at 20% but not tax someone who has not earned their huge windwall less than 1% of that amount?. Why is it better to tax work than unearned wealth?