Currently a major concern across the property sector, the pending threat of ‘mansion tax’ on UK home owners with properties valued at above £2million is causing much concern.
Will it affect Poole properties for sale now or in the future? Is the sun setting on the market for properties in this price band?
Looking at Berkeleys sold house price data here there have been 29 sales of properties over £2 million in BH13 and BH14 Lilliput area over the last two years. All sales have been houses, except one. An apartment sold during this period for £3.76million on Sandbanks Road. There are 86 properties currently for sale on rightmove in BH13/BH14 Lilliput areas valued at £2million +. There are 426+ for sale across all price bands. We should also mention land and plots, so important to this coastal spot. 12 plots above the £2million price point have also been sold.
Mansion tax will clearly have an affect on a relatively small percentage – maybe 5% – of local residents in this area because many residents are retired, living in large homes, yet living off low incomes. The key question is how will they find the resources to settle these new tax bills which could significant and annual charges. Labour is indicating that retirees may be able to defer their bills until the home owner dies. A cheerful prospect for people enjoying their later years, planning to help their families and grandchildren, not pay more tax.
For home owners with homes valued at close to £2 million or indeed above, the question is what to do now, if you are thinking of selling. The threat of mansion tax has had a major impact on the London market, and agents are reporting a slow down in sales in this sector. The £2million+ market has slowed in Poole too, but remember many home buyers in BH13 are buying ‘forever’ homes or relocating – moving out of London – financing their purchases in varied ways and continuing with their plans to move on regardless. They are less likely to be international buyers. We do not see this trend ending any time soon.
How does renting and letting feature in this scenario? We are actually seeing an upsurge in activity in this area currently, as home buyers choose to rent in the interim, whilst the picture is unclear. Owners of £2 million+ properties could choose to become landlords for the very same reason if they need an alternative option to selling in the interim.
The market for homes clearly valued under £2 million remains competitive and in our opinion will continue to be so this winter. This is the space to be in – the comfort zone – for the moment. There is no sign of the sun setting here.
If you would like to discuss the possible impact of mansion tax alongside your home buying or selling plans, get in touch with our Berkeleys BH13 office today. 01202 708383.