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 adjustments.
However, regular stamp responsibility charges will stay for second properties.
With the typical bought worth in London presently standing at slightly below £667,000, in keeping with Rightmove, Sayce says the brand new tax might result in a rise within the variety of folks leaving London for good.
Compare My Move’s quarterly knowledge reveals that there was an increase within the proportion of Londoners who go away London after they transfer.
In Q3 2024, 34% of Londoners who moved home left Greater London, whereas to this point 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 properties for a while, with common promoting costs falling yr on yr. Even so, the typical worth has not but dropped beneath the proposed £500,000 threshold.”
“If the brand new property tax is launched and tiered in keeping with home costs, it can put additional strain on Londoners to cut back their asking costs. However, I don’t assume cheaper properties will likely be sufficient to cease folks from shifting out of the capital when shopping for.”
“Londoners could also be discouraged from shopping for properties slightly below the edge due to issues that their house’s worth won’t rise sufficient to cowl the tax after they come to promote. There might be a worth hole between homes which are promoting for underneath £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 total worth. Once that is confirmed, we will predict its affect extra precisely.”
“Unless the tax is adjusted to account for regional variations, London is more likely to face a big affect, with many extra residents selecting to depart. I’d count on the proportion of Londoners shifting out to rise to over 40% as soon as the tax is launched, leaving sellers going through even higher difficulties.”
The announcement final week divided opinions throughout the mortgage market.
Propertymark stated the brand new tax “have to be rigorously thought of, match for future objective, and encourage the idea of homeownership for individuals who aspire to it”.
It highlighted that any revised system should help first-time patrons, second steppers and people seeking to proper measurement.
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 folks on the housing ladder.
“Economic development can come from decreasing the monetary burden of stamp responsibility which we all know will increase the variety of transactions, however any adjustments 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 assist long-term financial resilience and development”.
