The Chancellor of the Exchequer George Osborne has been slammed by London’s estate agents who insist that he, not the possibility of an exit from the European Union, is to blame for the recent slump in London’s property market.
In a bid to scare British voters into backing the campaign to keep Britain within the European Union (EU), Mr. Osborne has repeatedly warned that an exit from the EU could spell disaster for British homeowners in terms of falling house prices and rising mortgages.
But London estate agency Maskells have called on him to stop making the claim. They insist that his decision as chancellor to hike stamp duty is the factor driving a slow-down in the London property market, not the possibility of Brexit.
Their analysis of sales over the last two years in 104 London postcodes across central and south-west London shows that sales have slowed dramatically, the Property Industry Eye (PIE) has reported.
Within the £250,000 to £925,000 price bracket, sales are down 47.8 per cent, in the £925,000 – £1.5m bracket sales have dropped 7.8 per cent; and in sales over £1.5m, there has been a staggering drop of 58.2 per cent.
Volumes of sales had risen in just two of the 104 postcodes over the two-year period.
The analysis also showed that average prices had fallen in all three brackets, by 12 per cent, 14 per cent and 35 per cent respectively. And although of the 104 postcodes 46 per cent saw an increase in house prices, in 54 per cent they had fallen.
Prices were mostly on the increase in the lowest price bracket: those under £925,000.
Charles Curran, principal at Maskells, said: “The market has been fundamentally changed as a result of the Chancellor’s actions over the past 24 months and his blaming further housing market turmoil on a Brexit is just a further poke in the eye to the market.”
The Chancellor has repeatedly claimed that property prices would be adversely affected by Brexit. In early May he told ITV: “It’s already clear from the Treasury analysis that for example, there would a significant shock to the housing market, that would hit the value of people’s homes, that would hit the cost of mortgages.”
Two weeks later he deployed the claim again, saying: “In the long term, the country and the people in the country are going to be poorer. That affects the value of people’s homes and the Treasury analysis shows that there would be a hit to the value of people’s homes by at least 10% and up to 18%.”
In fact the Treasury report predicted that prices would rise regardless of Britain’s membership of the EU, but expected the rise to be 10 – 18 per cent higher if Britain remained a member.
But PIE’s readers are unconvinced.
One reader pointed out that it was not only the London market which had been affected by Mr. Osborne’s tax hike; the Home Counties markets had been too, saying:
“We have the most left wing Tory Chancellor in a long time, hell bent on raising more and more tax from fewer and fewer people. Our business saw the top end of the market under increasing strain when the top rate rose to 7 per cent. At 12 or 15 per cent it should come as no surprise that the number of top end transactions will reduce. The EU poll has nothing whatsoever to do with this.”
Another reader added: “A chancellor that has presided over lower transaction volumes, frightening off both foreign and UK investors, reduced stamp duty revenues and higher rents for tenants.
“Way to go George. If I had actively recruited you to interfere with and screw up the UK housing market I would be delighted at how well you had done.”
A third wrote: “The man’s a lunatic – and I’m a Conservative. He’s some kind of hard-left socialist. He and the Bank of England [are] pushing us over a cliff edge whilst claiming it’s good medicine for us. Morons.”