Reeves mansion tax reports turning property market into ‘stagnant swamp,’ estate agents warn

The uncertainty over the crunch Budget has seen the first annual decline in house sales in two years – with higher-value areas hit the hardest.

After the mansion tax was reported, shares in property companies sank in reaction to the news.

Vistry, a FTSE 100 housebuilder, saw shares slump by 1.9 per cent.

Becky Fatemi, partner at swanky auctioneers Sotheby’s, told her rich clients were seething at the reports of a mansion tax.

She said the clients had reacted to the news with “disgust… perceiving no incentive at all to be here”.

She added: “Today, I’ve had a few phone calls from people saying, ‘Look, whatever price I need to sell at, just reduce it to that so I can get it away’.

“But then I’ve got other clients who have told me, ‘Actually, I’m not going to sell. I’m going to wait for this Government to leave because there’s no way that they’re going to be able to sustain this kind of stupidity, and I’m just going to take my property off the market’.”

Ms Fatemi told the newspaper that Labour was “shrinking the economy quite dramatically and breeding a stagnant swamp”.

Will Watson, London chief at The Buying Solution, a property consultancy, said: “Clients who were willing to exchange a contract before the Budget are now saying they’re not.

“Until we know really what [the Government] is going to do, a lot of people will just sit tight.”

The Budget will be delivered by Rachel Reeves on November 26.