Ed Balls accuses estate agent of mansion tax scare ta...

High-end estate agency Savills has been accused by shadow chancellor Ed Balls of scaring everybody about the effects of the mansion tax.

Last month Savills - which has its headquarters in central London, enjoyed a £30.1m profit in the first half of the year and now calls itself the international real estate advisor - produced dramatic claims of how even the prospect of the tax was already hitting the housing market, some six months before the general election result was known.

The UK's prime housing market is expected to slow in the run up to next year's election and grow steadily thereafter, but the introduction of a mansion tax would change the outlook dramatically. It would take some time for the markets to accurately price in the impact of a mansion tax, but the threat has already slowed the market says the firm.

Now Ed Balls, speaking on The Andrew Marr Show on BBC1, has tucked into the agency.

He stoutly defended Labour's proposal for a mansion tax against suggestions by Marr that it may be unfair to asset-rich, cash-poor owners, and may generate less revenue than a more far-reaching capital gains on all transactions, as tried in other parts of the world.

When repeatedly pressed on Labour's proposals, Balls said: Of course Savills are going to scare everybody with its claims of the effects of the tax. Marr clarified to viewers that Savills was an estate agent.

When asked by Estate Agent Today about Balls' statement, Savills made no reference to the scare claim.

But Lucian Cook, the firms head of UK residential research, says: We would favour a revision of the council tax system. This would be more equitable, without the potential unintended consequence of punishing owners of lower value homes, or those who are equity rich but cash poor.

Mansion tax ranks with stamp duty reform as the most popular housing policies people want to see after the election, according to research from Rightmove.