Homes worth more than £2 million are now less than half as likely to sell as cheaper properties, according to new analysis that raises fresh questions about the impact of the Government's mansion tax.
The levy, announced in last year's Budget by former chancellor Rachel Reeves, is due to come into force in April 2028 and will apply to properties valued at £2 million or more.
But property data firm TwentyCi claims the policy is already weighing on the top end of the housing market.
Its analysis found that 53.1 per cent of homes listed below £2 million reached exchange stage between June and September this year. For properties above the £2 million threshold, the figure fell to just 25 per cent.
The data suggests that while 966 homes worth more than £2 million were sold during the period, a further 2,898 either failed to find a buyer or were withdrawn from the market altogether.
The figures are likely to intensify concerns about the health of London's prime property sector, which has already been hit by higher mortgage costs, increases in stamp duty and the abolition of non-dom tax status.
Under the mansion tax, owners of properties valued at £2 million or more will face an additional annual charge on top of council tax, with bills increasing on a sliding scale. For homes valued above £5 million, charges can reach £7,500 a year.
Estate agents and property experts have repeatedly warned that the tax risks deterring buyers and sellers at the upper end of the market, particularly in parts of central London where property values frequently exceed the £2 million threshold.
The findings come amid speculation that Chancellor John Healey could consider lowering the threshold in a future Budget, a move critics say would bring thousands more homeowners into the scope of the tax and potentially place further pressure on an already sluggish market.
Prime Minister Andy Burnham (left) and Chancellor of the Exchequer John Healey are preparing for the Budget on October 28
PA Wire
There has been speculation that Chancellor John Healey could reduce the threshold of the levy to properties worth £1.5 million.
This would mean that the number of homes affected by the mansion tax would soar from 144,000 to 271,000.
Such a move would have profound implications for families living in the capital, disproportionately targeting homeowners in London.
All but one of the top 20 most-affected constituencies are in London, according to analysis by estate agents Hamptons.
Colin Bradshaw, chief executive of TwentyCI, told the Times: "The findings provide a valuable snapshot of the £2m-plus market. They give agents and lenders a clear benchmark against which to measure future market performance."