Help to Buy vs Mansion Tax

In recent days, two maps have appeared which throw a bit more light on the state of the Lewisham housing market.

The first is in The Telegraph, which has mapped the boroughs according to the number of homes bought through the Help to Buy scheme. The areas in dark red are those which have made most use of the mortgage guarantee initiative.

As you can see, South East London is the biggest beneficiary, which is to be expected given that it's still a relatively affordable area and HtB is aimed at people trying to get on the ladder. So far, 41 homes have been bought with Help to Buy backing.

Secondly, this one from City AM, examines how many homes in each borough might qualify for Labour's proposed  Mansion Tax. Data from the Land Registry suggests only 12 houses in the borough would qualify, although that seems like a massive underestimate given current house prices. The Cator Estate alone must have more than that. Anyway, the key number is 23 - that's where Lewisham ranks in terms of London boroughs with £2m+ houses.

6 comments:

darryl1974 said...

Most of the Cator Estate (a few houses on Pond Road aside) comes under Greenwich (33 properties).

Headhunter said...

Mansion tax will be one of those taxes like stamp duty that increasing numbers of people are affected by. Yes, at the moment, few people own homes worth £2m+ but when stamp duty was brought in, it was intended as a tax that would only affect high value properties. Unfortunately over the years, successive governments have failed to raise the levels at which stamp duty affects a sale and now we are in the situation that 99.99% (if not 100%) of property purchases in London are hit with stamp duty....


If "mansion" tax is brought in, I wouldn't be surprised if in 10 or 20 years that the £2m threshold hasn't increased with property prices and that more and more home owners are being hit....

Brockley Nick said...

I think you'd create a house price ceiling. 1% of £2m is a lot of money for someone to find every year when they are already probably stretching themselves with a big mortgage.

If (a big if) property prices keep rising in line with recent trends, there will be quite a few houses in Brockley worth £2m+ in 5-10 years and they won't belong to people who can afford £20K a year on top of everything else. People who can afford such a tax would not move to Brockley and thus if a Mansion Tax is implemented, house prices would plateau at just below £2m. Which you could argue is a good thing (and still stupidly high in many ways) unless you are one of the people who owns one of those houses, I suppose.

Headhunter said...

Yes, you're probably right, it would limit the upper level of house prices and therefore all other properties in a place like Brockley. Some of the larger houses in the conservation area are already nearing £2m, a couple on rightmove have sold at around £1.5m and they need a lot of work.


I think this would might cause an even greater disparity between areas like Mayfair where 2 bed flats already hit 8 figures and other "super prime" areas in London which attract international investors who might be able to afford a paltry £20k per year and areas like Lewisham.


However it sounds like they're going to use council tax valuations to levy the tax and those are out of date.... One of the fiscal bodies out there said that it would be more effective to simply revalue properties across the UK for council tax than bring in yet another new tax....

terrencetrentderby said...

Or they could just reform council tax, maybe even update the ridiculous
1991value based bands and perhaps add another band, that way an actual mansion wouldn't be paying just a few hundred quid a year more than my shoebox.

Since property tax is hard to avoid for the UK's many leeches the evader friendly governments of new and old don't seem to be in a hurry to do anything about it.

Newby said...

Or they could just spend a bit less and we could all pay less tax.

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