LONDON (Reuters) – Demand for London’s most expensive homes fell last month as high-income earners worried about possible tax rises from Britain’s new centre-left government, a property data firm said on Tuesday.
According to LonRes, property sales in prime city centre locations in the British capital fell 7.5% compared to the same month a year earlier, while new sales orders rose 8.1%.
The average sales price for top homes was 4.2% lower than a year ago.
The market’s post-election rally came to a swift end as attention turned to potential tax rises when Labor Chancellor Rachel Reeves announced her first Budget on October 30, said Nick Gregori, head of research at LonRes.
“The negative sentiment is being amplified at the top end of the market, with more specific fiscal concerns in the form of ‘non-dom’ and other tax changes,” Gregori said, referring to the abolition of tax breaks for the income of some wealthy taxpayers abroad, announced in March by the previous Conservative government.
Prime Minister Keir Starmer said last month that the budget would be “painful” and that “those with the broad shoulders should bear the heaviest burden”, adding to speculation about higher taxes for the richest taxpayers.
According to Gregori, some agents reported strong interest from foreign buyers, while others indicated that some current international residents want to sell their homes.
(Written by William Schomberg; edited by David Milliken)
