Category: News

Boris Johnson is considering introducing a mansion tax for high value homes according to a Sunday newspaper.

The Telegraph – citing two separate but unnamed sources – says the measure is being considered as a way of helping pay for large scale infrastructure improvements, primarily in the north of England.

Both sources suggested that the PM and Chancellor Sajid Javid were looking for ways “to raise more tax from better off homeowners” and that the mansion tax had been discussed by the Treasury and Number 10.

“Some Treasury officials are understood to be keen on introducing what has been described as a ‘recurring’ wealth tax that would primarily affect London and the South East, possibly as a quid pro quo for cutting stamp duty” the paper says on its front page this morning.

Almost exactly seven years ago on February 14 2013 the then-Labour leader Ed Miliband pledged to introduce a mansion tax on high value properties: the policy was seen as contributing to Labour’s defeat at the 2015 General Election.

During the December 2019 General Election, Shadow Chancellor John McDonnell told the Financial Times that Labour would no longer advocate a mansion tax as it may be considered too radical.

Now the Telegraph is suggesting that the Johnson government is considering two options – an annual levy on high value homes along the lines of the original Miliband proposal, or an additional higher level of council tax for the most expensive properties.

No details of price thresholds or tax levels are mentioned.

“Some Tory advocates of the move point to New York, where property taxes are much higher” says the paper this morning.

“The talks [on a possible mansion tax] come as Treasury officials have privately compiled a lengthy menu of tax rises, including the proposed levy on expensive homes, capital gains, other stealth raids on business and even inheritance tax to pay for increased public spending while sticking to the Chancellor’s new fiscal rules” the article continues.

The surprising move under consideration by the Johnson government comes just a few days after it gave strong support to the stamp duty reform in 2014 introduced by then-Chancellor George Osborne.

Many estate agents and market commentators blame the Osborne reform for introducing high levy of stamp duty on expensive homes, and during his election campaign to become Conservative leader Johnson himself expressed strong reservations about stamp duty levels.

But the Treasury spokesman in the House of Lords – the Earl of Courtown – last week said: “The government has already made substantial reforms to the taxation of housing. At Autumn Statement 2014 the government reformed SDLT on residential properties, cutting the tax for 98 per cent of buyers who pay it, unless they are purchasing additional property.”

New research suggests the internet and broadband coverage have become even more important to buyers and tenants.

The study – involving 228 housing professionals and 2,000 homeowners or renters – shows that 86 per cent of the public claim having a decent connection in their property is important and 64 per said they would be put off by a home with slow Wi-Fi.

Overall 54 per cent are ‘more likely’ to purchase a property with a good connection.

Amongst property professionals 60 per cent of respondents rate ‘reliable, fast, fibre connectivity’ as critical and equivalent to being the fourth utility.

A further 32 per cent defined it as ‘a key attractor’ for buyers and renters.

A quarter of the public say they work from home on a regular basis and therefore rely on broadband.
Almost half – 47 per cent – want a decent broadband connection to keep in touch with their friends and family, and four in 10 use it for streaming TV shows and films.

Agents “dread” buyers’ questions on value, asking prices and nearby new development according to a survey.

Some 50 agents and over 1,500 owners who had purchased in the past three years were questioned by interiors firm Hillarys over their dealings with estate agents.

The questions the agents apparently dreaded most were:

– How much money has the property lost in value over the last X years? – 54%;

– Are there currently any plans for the local area that could affect us as homeowners? – 42%;

– What is the lowest price the sellers are willing to go? – 33%;

– Is the seller part of a chain and how motivated are they to sell? – 21%;

– Has anyone died in the property? – 18%

The agents also revealed some of the most unusual questions they’d been asked by prospective buyers during viewings included ‘do the pets/plants come with the house?’, ‘is there any chance that the home is haunted?’ and ‘would I be allowed to paint the house exterior?’

Suddenly Brexit Day is nearly here.

It may have taken three and a half years from the Referendum but the UK will, within days, be outside of the EU. Whatever one’s views, and whether or not that is a cause for celebration, there is substantial work to be done by the end of 2020 – the transition period.

The object is to achieve clarity over this country’s future, and that applies to our industry as much as any other. It will take years, possibly decades, for a stable post-Brexit landscape to emerge as this country disentangles itself from the EU.

The mistake is to assume that on February 1 we’ll wake up and “it’s happened” – in fact, the hard work may only just have started.

– Will today’s Boris Bounce turn into this summer’s Johnson Jitters?

Only those with a vested interest in talking the market down deny that there’s been a renewed confidence in the mainstream and prime buying and selling since the General Election.

There have been more sales completed (up 6.2% in December says HMRC, despite Christmas), higher asking prices (up 2.3% with the biggest New Year leap in 18 years according to Rightmove), and more optimism (a doubling in the number of agents expecting an improved market, says RICS).

But the question is, will this last? If, by the summer, there is no sign of a successful trade deal with the EU (or maybe even the US) the debate from September onwards will be defined by the question: Is the UK heading for No Deal at the end of the 2020 transition period.

If so, will the housing market return to something like the hesitant state it had before last month’s General Election?

– Will agency-focused legislation begin to diverge from the EU?

The introduction of the Fifth EU Anti-Money Laundering Directive into the UK just a matter of days ago shows how closely harmonised some agency-related legislation is with the European Union.

But there are more such links, much more commonplace than those surrounding money laundering issues. These are long-term issues agents have to think about.

For example, the Energy Performance Certificate (introduced in the UK in 2007) was a product of the EU Directive 2002/91/EC.

Now one might guess, especially in our current climate crisis political landscape, that EPCs will remain in place in the UK – but outside of the EU, the UK is now free to change them if it wishes. Will there be pressure to do so?

In construction, the British Board of Agrément – it even uses the French term for ‘approval’ in its name – is a certification body for some standards (FENSA for doors and windows, for example), many of which are based on EU legislation. Again, the UK may continue to harmonise with EU standards but it’s likely there will be pressure from some quarters to diverge.

There could be long-term, ongoing change affecting agents as a result.

– Will City of London job losses hit the capital’s high-end housing market?

So far the financial services fall-out from Brexit has been less-than-expected, but many players have made it clear they have been waiting to see if the UK would actually go, and if so under what terms.

Bloomberg has predicted that potential staff relocations from London include 4,000 staff from J P Morgan, 150 from Barclays, 1,000 from Morgan Stanley, 1,000 from Goldman Sachs, 1,500 from UBS and 1,000 from HSBC. This adds up to a potential 8,650 jobs leaving, out of a total of 48,000 London-based posts currently accounted for by these companies.

What of the City’s sales and rentals markets if London is somehow under threat as a premier financial hub?

– Will overseas buyers continue to want to buy in the UK?

There are two aspects here. Firstly, irrespective of Brexit, there’s the anticipated three per cent SDLT surcharge proposed by the government and likely to be confirmed in the March Budget. This will apply to overseas investment buyers living outside the UK.

The second aspect is Sterling: it went into freefall after the referendum (have you seen the cost of those holiday Euros?) and within a year of the Leave vote, those buying in the UK and using other currencies were receiving what were effectively discounts of up to 21 per cent.

If Sterling returns to something like its pre-referendum level soon, will those buyers go? And if so, will domestic buyers step in to bolster the prime London housing markets so heavily reliant on overseas interest?

– Will there be a labour force to meet UK’s new homes aspirations?

Leave to one side the abject failure of successive governments to meet housing targets in the past, and even without that this area looks like one of the biggest problems for the UK post-Brexit.

That’s because the 2017 Labour Force Survey (the most recent figures available) show non-UK workers were 14.5 per cent of the UK construction workforce, many from the EU.

The Construction Industry Training Board has led a number of schemes since 2017, aimed at fostering more home-grown construction workers.

Most notable has been the Construction Skills Fund – led by the CITB on behalf of the Department for Education – which aims to have trained 13,000 construction workers by the end of this year.

Will this and other projects provide enough labour, especially when hugely labour-intensive and heavily-delayed projects like HS2 and Crossrail drain resources at the same time as ambitious housebuilding targets are to be met?

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Boris Johnson may dismiss such concerns as examples of doomsters and gloomsters – but that doesn’t mean these challenges will not exist. Whether Britain meets these challenges is largely up to the politicians – but our industry will have to be prepared to monitor and match the changes as they emerge in the years and decades to come.

An estate agent has set up his own buying operation because he claims the quality of service for high-end buyers has “dwindled” in recent years.

Matthew Jackson, a former head of new homes and investment at London-focussed agency Chestertons, has now set up Oakmont Private Office.

He is damning in his assessment of how the industry has served well-heeled clients.

“Throughout my property career I have seen a decrease in the level of service clients receive from those who are meant to be acting in their best interests, with advice being far more focused on what will earn a fee than the creation of longstanding relationships” he says.

“I have therefore set up Oakmont to become a leading private office for international high net worth families and individuals, and to provide them with the best possible property advice and client engagement to create close and enduring working partnerships for many years to come.”

Jackson says his business will offer a bespoke service for HNW families and individuals in prime areas of London and the South of France, including Monaco.

A statement from the company explains that it will be “acting as the intermediary between selling agent and client, Oakmont manages the sales process from start to finish to include establishing an exacting mandate for each client, providing impartial and independent advice, shortlisting suitable properties on and off the market, undertaking full price and market related analysis, submitting offers, negotiation, pre contract due diligence, steering the transaction through to completion and collecting keys.”

Jackson’s business will also offer overseeing and/or organising refurbishment works and looking after property when vacant.

He will also offer a complimentary sales management service “to ensure the process of selling is as efficient as possible.”