Miliband’s mansion tax threat slowed housing market

LONDON house prices rose at their slowest rate in two and a half years in the weeks before the General Election when L a bour ’s threatened mansion tax spooked the top end of the market.

Average prices in April were 4.3 per cent higher than a year previously, the smallest increase since October 2012, according to latest official figures. They dipped by £5,000 during the month to £493,000, more than £20,000 below the peak recorded in August 2014.

However, most agents have reported a rush of buyers back into the market after David Cameron’s crushing defeat of Labour. Ex-party leader Ed Miliband had pledged to impose an annual tax on all homes worth more than £2 million to fund improvements to the NHS.

Jonathan Samuels, chief executive of lender Dragonfly Property Finance, said: “While annual London prices fell below the UK average for the first time in nine years in April, I wouldn’t expect them to stay there for long.”

The Office for National Statistics figures came as inflation returned to high streets. The Consumer Prices Index — the official measure of the cost of living — rose by 0.1 per cent in May, having dropped by the same amount in April.

Higher fuel costs and a rise in air fares were largely responsible for the change, while food prices dipped by 0.1 per cent. Inflation is expected to start slowly picking up in the autumn.