Labour’s proposal for a brand new property tax will “disproportionately have an effect on Londoners”, Compare My Move co-founder Dave Sayce reveals.
It was reported final week that Chancellor Rachel Reeves is contemplating a brand new tax on the sale of properties value over £500,000 as a part of wider stamp responsibility and council tax modifications.
However, regular stamp responsibility charges will stay for second houses.
With the typical offered value in London at present standing at just below £667,000, in response to Rightmove, Sayce says the brand new tax might result in a rise within the variety of individuals leaving London for good.
Compare My Move’s quarterly information reveals that there was an increase within the share of Londoners who depart London once they transfer.
In Q3 2024, 34% of Londoners who moved home left Greater London, whereas thus far in Q3 2025, this quantity has elevated to 39%.
Compare My Move co-founder and managing director Dave Sayce says: “Londoners have been discovering it tough to promote their houses for a while, with common promoting costs falling yr on yr. Even so, the typical value has not but dropped under the proposed £500,000 threshold.”
“If the brand new property tax is launched and tiered in response to home costs, it is going to put additional strain on Londoners to cut back their asking costs. However, I don’t suppose cheaper properties will probably be sufficient to cease individuals from shifting out of the capital when shopping for.”
“Londoners could also be discouraged from shopping for properties just under the brink due to considerations that their house’s worth won’t rise sufficient to cowl the tax once they come to promote. There might be a value hole between homes which can be promoting for beneath £500,000 and homes promoting for approach over.”
“At this stage, it’s unclear whether or not the tax will apply solely to the portion of a property’s worth above £500,000 or to the complete worth. Once that is confirmed, we can predict its affect extra precisely.”
“Unless the tax is adjusted to account for regional variations, London is prone to face a big affect, with many extra residents selecting to go away. I might count on the proportion of Londoners shifting out to rise to over 40% as soon as the tax is launched, leaving sellers dealing with even larger difficulties.”
The announcement final week divided opinions throughout the mortgage market.
Propertymark stated the brand new tax “should be fastidiously thought of, match for future objective, and encourage the idea of homeownership for many who aspire to it”.
It highlighted that any revised system should help first-time patrons, second steppers and people trying to proper dimension.
Propertymark head of coverage and marketing campaign Timothy Douglas welcomed discussions round reforming stamp responsibility as he says it’s a big barrier to shifting and getting individuals on the housing ladder.
“Economic development can come from lowering the monetary burden of stamp responsibility which we all know will increase the variety of transactions, however any modifications should work alongside differing property costs and the dynamic nature of our housing markets throughout the nation.”
However, ASK Partners chief government and co-founder Daniel Austin stated the brand new plans are a “short-term repair” that may “do little to shut the hole in public funds, stabilise the property market or help long-term financial resilience and development”.
