Analysis by a high end estate agent has revealed that 2.5% of homes in London would be affected by a planned ‘mansion tax’ on properties worth more than £2 million. To measure how this impact on the capital equates to the rest of the country, Knight Frank examined ten other markets to determine the top 2.5% by value and the equivalent ‘mansion tax’ entry point in each.

The top 2.5% of the West Midlands property market, for example, represents homes worth more than £472,216.

“The data puts the London housing market and the disproportionate impact of a mansion tax into a national context,” Tom Bill, Head of London Residential Research at Knight Frank, said. “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.”

He added: “Furthermore, the data underlines the mismatch between the term ‘mansion’ and reality of property markets across the UK.”
The firm says that 38% of all £2 million-plus properties in Greater London are flats while only 14% are detached properties. The second largest group are terraced houses (36%), while semi-detached properties made up the remaining 12%.

A mansion tax has been proposed by both the Labour Party and the Liberal Democrats, should either win May’s general election. The idea has come under fire from high profile opposition including celebrities Myleene Klass and ex-footballer Sol Campbell.

The main criticism of the proposed tax is that it will be unfair on ‘cash poor, asset rich’ owners in the capital. However, there will be tax relief for those owners, according to the Labour Party.

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