High-end agent says mansion tax picks on London

Some 2.5 per cent of London homes would be affected by the proposed mansion tax on properties worth more than £2m according to analysis by high-end agency Knight Frank.

To assess how this impact on London equates to the rest of the country, Knight Frank analysed 10 other markets to determine the top 2.5% by value and the equivalent mansion tax' entry point in each.

For example, the top 2.5 per cent of the West Midlands property market represents homes worth more than £472,216. In the south east of England it would represent properties valued at £925,440 and above.

The data puts the London housing market and the disproportionate impact of a mansion tax into a national context, said Tom Bill, head of London research at Knight Frank.

House prices have grown more in London than other regions in recent years but this reflects high demand and constrained supply more than wage growth or any greater capacity of London homeowners to pay tax. The data underlines the mismatch between the term mansion' and reality of property markets across the UK he claims.

Knight Frank analysis shows 38 per cent of all £2 m-plus properties in Greater London are in fact flats while only 14 per cent are detached properties. Terraced houses are the second largest group at 36 per cent while semi-detached properties make up the remaining 12 per cent.

Knight Frank says London contributed 42 per cent of all stamp duty revenue in England and Wales in the 2013/14 tax year, up slightly from 41 per cent in the previous year.