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?”
Guest
ATED is a tax on hiding assets in holding companies. It’s not remotely comparable unless you’re holding out for corporate natural personhood in law, as in America.
Your crying about 0.5% of the richest having to pay some tax shows why it’s needed. And then you’re complaining about a needed adjustment down to house values, aww.
Guest
Ohnoes, some fifth homes will be sold! How will people cope!
Guest
So you’re using anecdote and back of the envelope math. And it’s based on some hilariously wrong assumptions like how often people move.
Guest
We don’t have a property tax, currently.
You’re trying to conflate usage and tax on estate value (which has some broad exceptions for primary homes) with property tax.
You’re talking about some of the few taxes which the rich can’t easily evade, which is why they’re going up as a proportion, of course, as the UK economy fails.
Lorne Gifford
Take a look at the ATED tax rates and how the kick in value has changed. Apply those rates to the general housing stock and you’ll see where £1.2 bn comes from, and get a good indication of what’s being planned with mansion/home ownership tax