Well, it didn't take the London housing market long to react to the the mendacious and short sighted idiots from the Labour and Liberal parties and their ill thought out nonsense about Mansion Taxes.
Foxtons, the London estate agent this morning reported a "significant drop," in transactions in the second half. Now, London prices were anyway in nosebleed territory and some air needed to be released from the balloon but the actuality is, apart from the super rich bracket, transactions across the country have stopped stone dead since the Labour party conference. The market, is in practice in suspended animation until after the election. So, what does that actually mean?
Obviously, there will be a drop in stamp duty revenues. The trickle down to the rest of the housing market will cease but there will probably be price distortions sub £2m, especially in the £1-1.5m level where people will buy but will want a "margin of error," away from the £2m price point.
With fewer people moving all attendant service providers will suffer from solicitors, surveyors, removal firms, painters, decorators and so on. White van man has done very well out of the property boom; well, that's another group you've just alienated Mr Balls.
It is worth highlighting yet again to these fools who say whatever they think the particular constituency they are addressing wants to hear that people who buy a property at any price point are doing so out of already taxed income which for most, is over 50% when National Insurance is included. Even now, buying a £2m+ property elicits a minimum £140k stamp duty bill which obviously requires £280k of pre tax income, unless the buyer has a gain from his previous property.
The bottom line here is as it was when the coalition came to power. HMG doesn't have enough money and is incapable of balancing the books so they're intent on using any means at their disposal to smash, grab and spend because they lack the moral and political courage to properly reduce government spending, less of course for hitting the only people who can't defend themselves and who spend most of their time avoiding coming home in boxes from places we have no business being.
These idiots in Westminster should stop interfering and simply adjust council tax bands to reflect a modern reality. Smart money will move much more quickly than governments ever will; its the squeezed middle class, the infantry of the economy, who get hit relentlessly with headline sound bite politics. Frankly, all these deluded muppets achieve is to strengthen UKIP and they're lining themselves up for the electoral equivalent of 10,000 volts administered though bodily extremities next May.