Top-end property market gets a boost as budget brings relief

A 'mansion tax' that turned out to be far less extreme than feared is drawing wealthy buyers back to London and giving shares in traditional housebuilders a boost, writes Emma Haslett

- Emma Haslett

Within minutes of the end of Rachel Reeves's budget speech on Wednesday, Will Watson, head of the Buying Solution, a London agency that finds buyers top-end properties, had received WhatsApp messages from two clients. “Both have been in negotiations on properties,” he said, “and both of them said, ‘right, let’s get going. Let's lock this down now.”

Agents in the parts of London where house prices hover around £1,000 per sq foot, including Chelsea, Mayfair and Notting Hill, had blamed fevered speculation over the budget for sluggish growth over recent months: figures published in October by Savills showed 41% of prospective top-end buyers had, “directly as a result of tax rumours”, become less committed to buying homes in the capital.

But after the chancellor's “mansion tax” turned out to be far less extreme than feared — a banded council tax surcharge on homes worth more than £2m, which will start at £2,500 a year and rise to £7,500 a year for homes worth more than £5m from April 2028 - they say the way is clear for a surge of deals.

Reeves ducked the opportunity for a broader reform of a council tax system still pegged to 1991 values and widely regarded as unfair.

Stuart Bailey, head of super prime sales at Knight Frank, is anticipating “a release of those deals that have been under offer. People will think, ‘right, let’s crack on.”