General Election 2015: The property market is freaking out at the prospect of a Labour government

Emma Haslett
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Property will become a "less attractive investment" under a Labour government, Zoopla said (Source: Getty)

The property market is terrified of Labour-led government, one of the UK's largest property search websites has suggested, thanks to the prospect of falling house prices and rising interest rates.

More on this story: How Tony Blair presided over the biggest rise in UK house prices in recent history

According to Zoopla, Labour's policies on the housing market, which include giving councils the power to double council tax on homes left empty for a year and giving first-time buyers priority access to new homes, will "make UK property a generally less attractive investment".

Labour has also pledged to introduce a mansion tax on homes worth more than £2m, although it will also abolish stamp duty for first-time buyers.

But today Zoopla said the best outcome for those in the property sector would be a continuation of the current coalition.

[Property] will appear less attractive to owners as a result of proposed new property taxes, less attractive to landlords and investors as a result of proposed new rent controls and less attractive to first-time buyers and lenders as a result of proposed changes to current government support schemes. The follow-on impact of falling house prices and lower consumer spending to the overall economy could be significant.

Zoopla's Lawrence Hall added that the mansion tax will be significant to those wishing to invest in the UK.

Property exodus? Labour's housing plans

- Mansion tax on homes worth £2m+

- Rented homes - three-year tennancies to become "the norm"

200,000 new homes a year by 2020

- Reinvesting savings from Help to Buy Isa in building new homes

- "Use it or lose it" rule to prevent developers sitting on land

Doubling council tax on homes empty for more than a year

"[It] is a great example of a good political soundbite but a poor policy. It started out as an idea to tax billionaire non-dom property owners and has turned into a proposed tax on working British families. UK homeowners already pay the highest property taxes in the developed world, so the introduction of any new tax would be value destructive to the entire UK property market.

"But using a sledgehammer to crack some of these walnuts by further taxing working Brits primary residences and imposing controls on all landlords and tenants is dangerous to the health of the overall housing market.”

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