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\t\tTaylor Wimpey blames its performance on Budget uncertainty.\t<\/p>\n
Ordinary London home owners are set to be hammered by Rachel Reeves\u2019 Mansion Tax and skyrocketing council tax. But the capital will prove resilient, says James Evans<\/strong><\/p>\n It\u2019s going to be an interesting year ahead for the capital\u2019s\u00a0property owners and how they deal with the fallout from the Budget.\u00a0<\/p>\n Central to this is how London property owners navigate the so-called Mansion Tax on properties\u00a0valued\u00a0at \u00a32m and above. Which incidentally will only raise \u00a3400m for the government\u2019s coffers.\u00a0<\/p>\n The annual charge, proposed in the Autumn Statement will be added on top of council tax which will also increase from 2028.<\/p>\n It\u2019s a body blow for London homeowners. Particularly given the Capital and south east are home to 85 per cent of properties meeting this value. However, talking to our residential property owners and investment clients, our view is that the outlook for the London property market will remain steady into 2026.<\/p>\n London is London. So despite this assault on the capital\u2019s housing market by the Chancellor, buyers and sellers will continue to be guided by real-life decisions and the fundamentals that support demand across our great city.\u00a0The Capital has long shown an ability to absorb policy shifts while maintaining strong demand across a broad range of price points.<\/p>\n But back to the Mansion Tax. There is no doubt that the devil will be in the detail of the valuation process itself. This will require regular reassessment of property values and an added admin burden for owners and the HMRC.\u00a0\u00a0<\/p>\n There have been multiple column inches charting how this punitive policy will hit ordinary home-owning Londoners and those in the south east of England.\u00a0Harder indeed than castle owners on the south coast\u00a0or those in stately piles in the borders i.e. those who live in actual mansion \u2013 not a one bedroom flat in a smart London neighbourhood!\u00a0<\/p>\n Mansion or one bedroom flat?<\/p>\n Ms Reeves is taxing ordinary success in the Capital. It\u2019s a misguided Robin Hood tax.\u00a0Yet we\u2019re already seeing many Londoners who\u2019ve held off \u2013 starting to move again.\u00a0<\/p>\n \t\t\t\t\tRead more<\/p>\n \t\t\tHouse prices hit record high but overall growth slows<\/a><\/p>\n Undoubtedly, for some this tax will be impossible to navigate next year. It will drive out long-term residents who are the pillars of our postcodes. Creating a cliff edge around the threshold, distorting buyer and seller behaviour and representing life-changing sums for many. Also shrinking the pool of buyers.\u00a0<\/p>\n Yet it could also be positive for fringe areas of London which represent good value.\u00a0 For example New Malden (which sits between more expensive areas like Wimbledon and Kingston) and where you can buy a three to five bedroom house for under the threshold.<\/p>\n So, we\u2019re already seeing many who\u2019ve held back due to uncertain market conditions and Pre-Budget hype getting back on the ladder.\u00a0<\/p>\n Primarily because they\u2019re having more kids;\u00a0are moving in together; realised they are hating their entertaining space during holiday season hosting;\u00a0have had a chat with their parents over a festive drink on lifetime \u2018gifts\u2019; or are planning to get divorced as the January blues hit.\u00a0<\/p>\n London buyers will venture back. Not because the Budget has been fair. Or indeed because they\u2019ve been smart on how to naviagate the Mansion Tax. But simply because people need homes near where they work, near their friends and where they want to spend their leisure time. Life just can\u2019t be put on hold forever.<\/p>\n So what\u2019s next? In our view, an area where the government has missed a trick in 2025 is Stamp Duty: reform is long overdue if the government gets its valuations right.<\/p>\n In 2026, the government really should look at reform that encourages people to move, not make it harder for ordinary Londoners to get on or move up the ladder.\u00a0<\/p>\n James Evans<\/a>, CEO of leading London real-estate agent\u00a0Douglas & Gordon<\/a><\/strong><\/p>\n \t\t\t\t\tRead more<\/p>\n