By James Robinson, General Manager of Lurot Brand
The London Property market has been the envy of the world. It has historically doubled in value every ten years and you could almost set your watch by its utter predictability as it adhered to the 18 year economic cycle; and so it would have continued if it wasn’t for the ineptitude of politicians.
Back in 2013 it was broadly reported that Britain had the highest property taxes in the developed world, and that was long before George Osbourne’s tax war on people’s homes.
In Prime Central London, sales have fallen from 6,288 in 2013 to a pitiful 3,730 in the full year of 2016. This pales in significance when compared to the days of low property taxation when in 2000 there were 11,243 sales.
Taking a broader view, in 2014 the Land Registry reported that 135,505 homes sold in London. Their most recent available data shows that in the 12 months to April 2017 these have fallen 44% to 90,332 transactions. In the Royal Borough of Kensington and Chelsea they report that house sales have dropped from 2,791 to 1,354 representing a collapse of 52%.
Quite simply Londoners have been taxed out of being able to move.
The government boasted that they raised of a record £7.7 billion in Stamp Duty revenue in just the first eight months of this financial year. Considering 95% of all buyers paid less SDLT than before and the rich are paying the majority, this is a populist tax which this woefully unpopular government can ill afford to repeal.
Tax revenue is up because property values are up, but consider what could have been raised in company taxes, PAYE and National Insurance contributions through the estate agents, solicitors, surveyors, mortgage firms, removal companies, builders, photographers, floor-planners, and all the other ancillary services the property market supports.
These taxes, (together with Brexit uncertainty) are also precipitating a brain drain of talented Europeans who are leaving, and without them our city and indeed our country will be in trouble.
Brexit is a big consideration for everyone so it is shameful to witness a Conservative government sacrificing the London property market for political expedience, when they should be making moving to, or staying in London, as attractive as possible for the people we so desperately need.