Property television presenter Kirstie Allsopp has criticized the Labour party's tax policies, stating they have caused a "massive own goal" leading to a reported 25% slump in house prices in certain areas of London. Allsopp highlighted a report indicating that homes in parts of the capital have lost approximately £300,000 in value over the past year.
The price decrease is linked to Labour's introduction of increased stamp duty on higher-value homes, a surcharge on second properties, and an annual "mansion tax" on properties exceeding £2 million.
Allsopp commented on social media platform X, formerly Twitter, stating, "Massive own goal, they were warned, multiple times, but they knew better." Concerns have been raised that further tax increases may be planned by Labour officials in the upcoming October Budget to finance government spending initiatives. Potential measures could include additional taxes on middle-class homes, capital gains tax, and inheritance tax.
Official figures released recently indicated that government borrowing increased unexpectedly in the previous month, with spending exceeding tax receipts. This situation presents challenges for the Chancellor.
Separately, data from the Office for National Statistics showed that the average UK home value rose by 2% in the year to June, reaching £272,000. However, this national average masks regional disparities. While areas like the North West and North East saw price increases exceeding 4%, London experienced its tenth consecutive month of decline, with the average property value falling by 2.5%.
The City of Westminster, encompassing areas like Mayfair, Belgravia, and Marylebone, was the hardest-hit borough in London, with prices dropping by 25% to £854,198, a reduction of £290,624 in value. In Kensington and Chelsea, property values decreased by over £215,000, or nearly 15%, over the past 12 months, falling from approximately £1.5 million to around £1.25 million.
Other London boroughs that experienced significant price drops include the City of London, down 20%, and Tower Hamlets and Hammersmith and Fulham, where average house prices fell by 13%. The current standard stamp duty rate is 12% for homes valued over £1.5 million, rising to 19% for overseas buyers purchasing second properties.
Stacy Eden, head of real estate at tax consultancy RSM UK, has called for stamp duty reform to alleviate "penal rates at the top end" and to provide a boost to the housing market. These tax changes coincide with a period where even affluent families are facing difficulties affording expensive homes due to elevated mortgage rates. Furthermore, a crackdown on non-domiciled residents and the prospect of further wealth taxes have reportedly led to an exodus of wealthy individuals and entrepreneurs from the UK, impacting housing demand, particularly in London.