There are still six months until the 2015 General Election, but already the potential policies that may be enforced are having an effect on the property market, reports Richard Carr.
Rental market booming
Propertyweek.com reported last week that London’s £100,000-plus and £1million-plus per annum rental markets are booming – and they believe it’s because of ‘Mansion Tax’ and the recently amended ‘Stamp Duty’.
There has been a 12.8% rise in the number of properties let at rental values of over £10,000 per week compared to the same period in 2013.
Remarkable the average weekly rent in London’s ultra-prime lettings market is more per year than it costs to buy the average home outside the capital in England and Wales.
People don’t like being taxed
This latest move illustrates that people won’t just accept being taxed more because of their earnings. With the possibility of ‘Mansion Tax’ looming, people are choosing to rent rather than take out mortgages on £1m+ homes and potentially pay large amounts in tax.
Across prime central London, the average rent paid in the third quarter of 2014 was 6.5% higher than 12 months earlier, which was the highest rate of growth for more than three years.
Interestingly, Propertyweek.com also revealed that Mayfair is London’s top lettings address. In 2009, Mayfair had only 5% of ultra-prime market lets, but by mid-2014 its share had risen to 13%.
A capital drain is nearing
Richard Carr has forecasted such problems in the market following Labour’s ‘Mansion Tax’ announcement. He now says that everyone is waiting to see if the ‘Two Ed’s and a Salmon’ show is going to go live!
He believes that the recent reports show that there is now concrete proof that there will be a capital drain as the General Election nears. It also shows that the government can’t just keep taxing people or they will literally move away.
About Richard Carr
With over three decades of experience in the Leisure and Hospitality sectors, Richard Carr has developed a broad range of skills and qualities.
Furthermore, he is widely regarded in the UK leisure industry as being one of the most innovative operator, having won many accolades. Has a very fertile imagination and a passion for architecture and design.