Reeves mansion tax reports turning property market into 'stagnant swamp,' estate agents warn
After reports that the Chancellor could impose a 1 per cent annual levy on properties value over £2million, estate agents in London have been swamped with calls from worried sellers
Rachel Reeves has been accused of turning the housing market into a 'stagnant swamp' with fears of a mansion tax hitting London's property market.
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After reports that the Chancellor could impose a 1 per cent annual levy on properties value over £2million, estate agents in London have been swamped with calls from worried sellers according to the Telegraph.
According to the reports, sellers are cutting prices to try and get their properties sold but many are seeing agreed buyers pull out in fear of the tax.
Under the plans, a £3million house would face an annual bill of £10,000.
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The uncertainty over the crunch Budget has seen the first annual decline in house sales in two years - with higher-value areas hit the hardest.
After the mansion tax was reported, shares in property companies sank in reaction to the news.
Vistry, a FTSE 100 housebuilder, saw shares slump by 1.9 per cent.
Becky Fatemi, partner at swanky auctioneers Sotheby's, told her rich clients were seething at the reports of a mansion tax.
She said the clients had reacted to the news with “disgust... perceiving no incentive at all to be here”.
She added: “Today, I’ve had a few phone calls from people saying, ‘Look, whatever price I need to sell at, just reduce it to that so I can get it away’.
“But then I’ve got other clients who have told me, ‘Actually, I’m not going to sell. I’m going to wait for this Government to leave because there’s no way that they’re going to be able to sustain this kind of stupidity, and I’m just going to take my property off the market’.”
Ms Fatemi told the newspaper that Labour was “shrinking the economy quite dramatically and breeding a stagnant swamp”.
Will Watson, London chief at The Buying Solution, a property consultancy, said: “Clients who were willing to exchange a contract before the Budget are now saying they’re not.
“Until we know really what [the Government] is going to do, a lot of people will just sit tight.”
The Budget will be delivered by Rachel Reeves on November 26.