The findings of a recent report conducted by the Joseph Rowntree Trust has suggested that a higher rate of council tax should be paid by occupants of houses worth over £1m. According to the report the income derived from the extra taxation would mean that the poorest tenth of the population would have their bills reduced by more than 10%. The report states that Council tax is in need of urgent reform as it has not been assessed since 1991. The tax was put in place to tax a higher proportion of cheaper properties compared to expensive homes which is why it deemed to be so unfair. The government provides loans in the forms of grants to freeze increases in the tax but this is becoming increasing expensive to do.
The Conservatives have so far resisted the mansion tax which is being sought by the Liberal Democrats but it looks like this demand will not go away particularly as house prices are continuing and it doesn’t seem fair that a mansion valued at £5m should be paying the same tax as a family in a 3 bedroomed home. For more information on the report please go to the Joseph Rowntree report here.
January saw a large number of vendors looking to cash in on the booming property market. Rightmove the online estate agent said that the number of sellers looking to sell their properties had increased dramatically compared to a year ago. They also said that they have had their busiest January on record as their website received £50m hits per day or 500 hits every second. Whilst the number of sellers had increased so has the number of buyers with buyers up 50% on a year ago. People are scared that they are going to miss out and there is a frenzy out there that has been created by the Help To Buy scheme and the cheap money that is being thrown at buyers.
Some estate agents are reporting record numbers of buyers and in many parts of Britain house prices are up 10% on a year ago. Gazumping is also back and many houses that are coming to the market are being chased by more that one buyer which is also pushing up prices. Prices in London are now at an all time high of just over £450,000 which is also causing alarm amongst many commentators who believe that the government should consider pulling the plug on the Help To Buy scheme before the average price is pushed up to the 600k threshold.