LONDON (Reuters) – A property data company said on Tuesday that demand for London’s most costly homes fell last month as high-income earners grew wary of tax hikes by Britain’s up-to-date centre-left government.
LonRes said property sales in prime, central locations in the UK capital fell by 7.5% compared with the same month a year earlier, while the number of up-to-date sales orders rose by 8.1%.
The average selling price of prestigious properties was 4.2% lower than a year earlier.
The July post-election rally quickly ended as attention turned to the possibility of tax rises when Labor finance minister Rachel Reeves announced her first budget on October 30, said Nick Gregori, head of research at LonRes.
“The negative sentiment is reinforced at the high end of the market, where more specific budgetary concerns relate to non-domestic tax changes and others,” Gregori said, referring to the previous Conservative government’s announcement in March to scrap tax breaks for overseas income for some wealthy taxpayers.
Prime Minister Keir Starmer said last month the Budget would be “painful” and “those with broader shoulders should shoulder a heavier burden”, fuelling speculation about tax rises for the wealthiest taxpayers.
Gregori said that while some real estate agents had noted mighty interest from foreign buyers, others suggested that some current foreigners were interested in selling.
