Could Labour affect Central London Property Prices

Price growth in prime central London over the next five years could be radically different according to which party wins the election according to estate agency Chestertons.

Data produced by the agency says that if the Conservatives win, prices will grow between five and 10 per cent in each year from 2015 to 2018 inclusive, adding up to a cumulative growth total of no less than 31 per cent over that time.

But if Labour, or a Labour-led coalition government prevails, growth will be between only 1.5 per cent and eight per cent, adding up to only 18.5 per cent growth.

“If a Conservative government is in power following the election, we expect the market to settle back into growth mode with average prime values rising by around five per cent over the year, after flattening during the pre-election period” says the agency’s head of research, Nick Barnes.

“If a Labour or Labour/Liberal Democrat coalition administration is returned this could result in a temporary decline in values as owners and buyers alike wait to see whether the promised tax hikes are introduced” he warns.

Barnes says there are other political concerns hitting the market in the shorter term, too.

He says that confirmation is still awaited of details regarding the introduction of Capital Gains Tax on the sale of residential properties by non-resident owners from April 2015. “This has certainly sparked considerable concern among expatriate Brits who have retained the family home whilst living overseas, especially if they have rented out their property whilst away” says Barnes.

Foreign non-residents are equally anxious and the cumulative effect of this on top of the increased taxation of so-called ‘enveloped properties’ and the possibility of a mansion tax “may prove decisive for some overseas buyers” he warns.