Housing will feel the loss of bankers
A WINDFALL tax on banks and a clamp down on bonuses could den the recovery of the ravaged house property market, industry experts said yesterday.
Knight Frank head of research Liam Bailey said: “In the recent past bonuses have had the impact of increasing demand for top London properties. A tax on bonuses will undoubtedly limit potential price growth and demand.”
Douglas & Gordon director Edward Mead added: “The clampdown on bankers would have a dramatic affect on the housing market. They count for a fairly sizeable slice of the market – and if bankers are removed as potential buyers then it will knock the housing market.”
But DTZ head of residential Russell Taylor said that the lack of bankers would mean a further jump in the number of prime housing sites snapped up by overseas investors.
“It will slow the transactions and recovery, but probably not affect prices. There is still demand for a Mayfair postcode. A drop in bankers will be quickly swooped on as an opportunity for other buyers”.
FORMER TORY CHANCELLOR GEOFFREY HOWE
CONSERVATIVE chancellor Geoffrey Howe imposed the first windfall tax, a Special Tax on Bank Deposits, in the 1981 budget. At the time it raised £350m from the clearing banks.
But Labour has also imposed windfalltaxes, with then Chancellor Gordon Brown taking money from companies privatised under the Telecommunications Act 1984, the Airports Act 1986, the Water Act 1989, the Electricity Act 1989 and the Railways Act 1993.
Companies such as BAA, British Energy, British Gas, British Telecom and Railtrack all had to pay. It raised around £5bn, and was spent on Labour’s new deal for the unemployed.
BY JAMES LINACRE