Yahoo Finance: Russell Simpson election research reveals prime property market struggles under Labour government
- By Adam Foster
- 16 April 2015
High-end sales in central London will drop by a third if Ed Miliband’s party win the election, paralysing the market, new research claims.
The number of luxury homes sold in central London could fall by as much as 27pc if Labour comes to power and introduces a mansion tax on homes worth more than £2m.
This could be bad timing for both developers and vendors as a £12bn pipeline of plush pads is expected to arrive on the market by the end of the year.
Further Labour pledges, such as the promise to scrap tax relief status for “non-doms”, have also shaken the high-end market, fuelling fears that the luxury London property bubble could soon burst. New analysis from estate agent Russell Simpson has shown that the number of high-end sales will drop 27pc if Labour is elected.
However, if the Conservatives win then transaction volumes jump 20pc. The heightened demand will then boost house prices.
The research analysed the six-month period before and after all general elections since 1992, when John Major retained a Conservative government. The number of £2m homes that sold in the following half year rose 19pc. * The Tories’ Right to Buy is great but the real solution is more houses * Is the election result a no win for the British property market? After Tony Blair’s win in 1997 and 2001 sales fell 23pc and 27pc respectively.
Will the luxury homes market in London go down the toilet if Labour get into power?
These data follow a report from upmarket estate agent Douglas & Gordon that revealed the sale of homes worth more than £2m has fallen 80pc in the last year.
Additional statistics from Lonres also showed that price per square foot in properties over the mansion tax threshold had fallen 38pc in the first quarter of the year compared with 12 months ago.
On top of the pre-election jitters and a post-election fall in sales, should Labour win, nearly 8,000 new luxury apartments are expected to be completed and go on sale this year in the heart of London – a pipeline worth £12m.