Buyer confidence has been undermined by high interest rates, inflation and speculation over what John Healey, the new Chancellor, might announce in his first Budget, property experts told The Telegraph.
Rumours have mounted that Mr Healey will lower the thresholds for Labour’s mansion tax, known officially as the high value property surcharge.
As it stands, homes worth more than £2m will be liable for the new tax from April 2028. But Andy Burnham’s Government has failed to rule out lowering the threshold to £1.5m – a move which would drag an additional 137,000 homes across England into the tax net.
Tom Bill, of Knight Frank, said the Government was “likely to fund its spending commitments by increasing taxes on wealth and assets”.
“The unpredictable events in the Middle East mean there is nothing to suggest mortgage rates will drop materially in the short term, which should continue to keep a lid on prices this year.
“Meanwhile, the Government is likely to fund its spending commitments by increasing taxes on wealth and assets, which means the new high-value council tax bands introduced in November’s Budget increasingly look like introductory rates.”
