LONDON (Reuters) – Demand for London’s most expensive homes cooled last month as high earners worried about the possibility of tax hikes from Britain’s new center-left government, a property data company said on Tuesday.
LonRes said property sales in central locations in the British capital fell 7.5% compared to the same month a year earlier, while new sales instructions were up 8.1%.
The average sales price for prime real estate was 4.2% lower than a year ago.
The post-July election rebound quickly ended as attention turned to the possibility of tax increases when Labor Finance Minister Rachel Reeves announced her first budget on Oct. 30, said Nick Gregori, head of research at LonRes.
“The negative sentiment is amplified at the top end of the market, with more specific budget fears in the form of ‘non-dom’ and other tax changes,” Gregori said, referring to the elimination of tax breaks for some wealthy taxpayers abroad. income announced in March by the previous Conservative government.
Prime Minister Keir Starmer said last month that the budget would be “painful” and that “those with the broader shoulders would have to bear the heavier burden.”
Gregori said that while some agents reported strong interest from foreign buyers, others suggested that some current international residents were looking to sell.
