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
64 Responses to “Media Watch: Times blames Mansion tax fears for London house price drop. But where’s the evidence?”
Lorne Gifford
🙂
JamesTennant
I would argue that that was to some degree covert but entirely intentional. The economy is collapsing and one way to create an illusion of wealth (and possibly votes in an election) is money printing via housing.
Cole
I repeat. The point of the article is the sloppy reporting by The Times. If there’s evidence, can’t they be arsed to find it?
Dave Stewart
You could argue that it makes more sense to tax unearned wealth than work. Those who earn their living though working are actively contributing to production/economic growth and should be encouraged. Those who earn their living based on assets they inherited or which have grown enormously in value contribute not a jot to the economy.
Dave Stewart
I agree with this however the problem is it would take a lot of time and exspense to implement. You would need first to go through a huge amount of political rangling because it is deeply unpopular in a lot of middle income to affluent areas (the people also most likely to vote) as these are the people who will end up paying more. Also you would need to fund, organize and impliment a nationwide revaluing program. There are an awful lot of houses which would need to be re-valued and this would take an awfully long time. Only then could this be rolled out.
The mansion tax however is pretty simply to administer it only affects the most wealthy in the country so politically it is easier to achieve and will be able to be implemented much faster. This means that the revenue would be raised much quicker for immediate use.
I think in the long term we need to have a process by which we as a nation look at how we tax wealth but this would require a very slow and inclusive process requiring cross party consensus but hopefully will result in a simpler more progressive system than we currently have.