Prime Homes Drive Housing and Economy
The key findings were:
- Between 2003-2012 there were 3,335 sales of property valued at more than £2 million in Westminster – 8% of the total number of transactions, but accounting for more than 40% of value.
- The evidence suggests that the great majority of this small proportion are either occupied by the owners or rented to London workers.
- Westminster on its own yields more Stamp Duty Land Tax (SDLT) than 29 of the largest local authorities in the UK combined (£348 million in 2012-13).
- Owners of properties worth more than £15 million spend around £4.5 million each in London annually and those owners in the £5-£15 million range spend around £2.75 million. Owners in the £5 to £15 million price band and of properties above £15 million, together contribute at least £2.3 billion a year to London and the wider economy.
- Also, the prime sector is not a major direct driver of the increase in London house prices as is sometimes asserted, nor are the number of prime homes a major factor in Westminster meeting its housing need.
Responding to the report, Councillor Robert Davis, Deputy Leader of Westminster City Council and Cabinet Member for the Built Environment, said: “This independent report strongly counters the perception that overseas investors are buying high value properties in London as an investment and then leaving them empty.
“In fact it shows that the prime residential market is an engine room within the UK economy, generating jobs and growth for London, and billions for the UK”.
What this research shows is that Chancellors of the Exchequer need to be cautious about hammering the wealthy with taxes that might deter them from buying properties and living in central London.
This research proves what we as agents have known for years, that contrary to popular perception, these people do help to boost the London economy. They spend huge amounts in restaurants, shops, employing staff, buying cars etc etc.
For the sake of London and the British economy as a whole, let us please not let our politicians frighten the wealthy away with over punitive taxes. Politicians may feel that by hammering the wealthy they are ingratiating themselves to the electorate. However, this research I think proves, that it could have highly negative consequences for this great city and country.
History proves this point. For a present day reminder, one only has to look across the Channel at what Monsieur Hollande has done to France!