Budget increases prime property tax burden but brings clarity to market. The Budget did deliver two of the many proposed property tax increases but, while unwelcome news for the market, sentiment is likely to improve in the immediate term as the most punitive measures were avoided and there is now clarity on future tax liabilities for anyone thinking about buying or selling after a long period of uncertainty. Average values across prime London fell by 4.0% on an annual basis in November and were 4.2% below their pre-pandemic (2017 - 2019) average level. The average discount from initial asking price increased to 9.3% in November, from a revised 9.1% in October. The new annual tax on £2m+ homes could put further downward pressure on values, although it is likely that the recent falls have partly been a result of a potential change being ‘priced in’ by buyers and sellers.
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