London Luxury-Home Price Increases Slow on Tax ConcernsPatrick Gower
Home prices in London’s wealthiest neighborhoods rose at the slowest pace in five years during 2014 as the prospect of new property taxes after next year’s national election deterred buyers.
Values in the 13 districts that Knight Frank LLP defines as prime central London climbed 5.1 percent this year, the broker said in a report today. Prices fell 0.1 percent in December from the previous month, the second straight decline.
Chancellor of the Exchequer George Osborne on Dec. 3 announced changes to the stamp-duty transaction tax that made it more expensive to purchase homes costing more than 937,000 pounds ($1.5 million). There’s concern that more changes may be made after the May election, Knight Frank said.
“The composed initial reaction to the stamp-duty changes and the fact annual growth has been moderating for three years indicate the market has priced in some form of political intervention,” Tom Bill, head of London residential research at Knight Frank, said in an e-mailed statement.
The opposition Labour Party has pledged to introduce a “mansion tax” on homes costing more than 2 million pounds if it wins the election.