“The nine most terrifying words in the English language are: ‘I’m from the government and I’m here to help.’” President Reagan, 12th August 1986
There is no doubt that these words from President Reagan were an amalgamation of prior witticisms, but it raises the spectre that many of our readers still fear – overreaching government involvement in their lives.
The chilling effect of this fear became even more apparent this weekend after an article in the Telegraph, which suggested that Government officials could come knocking at your door and denying them entry would lead to a potential criminal offence and a fine.
They framed it as a “sinister assault on civil liberties”. Now before everyone panics and heads off to Terminal 5, we wanted to allay some fears: As we understand, HMRC do not have the power to enter or inspect private residences without a warrant.
VALUATION AND INSPECTION
The Valuation Office Agency (VOA) however do have the power to inspect private residences, but they cannot simply walk in and nothing proposed, that we can see, has changed this.
The VOA must obtain First Tier Tribunal approval and demonstrate that entry is justified. A written notice must then be given, and the VOA must produce written authority to enter if asked.
So, this is not the case of men in raincoats turning up un-announced in a Trabant in the early hours, and this power has been around since at least 2015.
If the contention, however, is that this is to change and Government officials will be able to simply walk into your private residence, then we will set up a stand at Heathrow where you can sign our Agency Agreement and drop off your keys before you board.
THE TAX QUESTION
The fact that there has been so much debate on this over the past few days, we believe, is more to do with the fear of what the government will tax next. And, like his predecessor, Mr Burnham has done nothing to allay those fears.
Ever increasing taxes cannot continue and if they do, the wealthy will continue to leave and economic investment will be limited.
Arthur Laffer (of Laffer Curve fame), in an interview, suggested that Governments fined (or, as he maintained “Taxed”) citizens to change behaviours – so a speeding fine would encourage drivers to slow down or a tax on Tabacco would encourage people to stop smoking.
It therefore follows that if economic growth is the goal, how, he argued, would greater tax on business and citizens achieve that result?
The Government will not accept that large numbers of people are leaving because of tax, and that may well be true in terms of absolute numbers, but the people who are leaving represent many high-rate taxpayers.
PRESSURE ON PRIME CENTRAL LONDON
This exodus has reshaped the prime central London market: Lonres, the authority on Prime Central London property performance, has recorded an annual 7.9% fall in average prices achieved in July, with values now on average 25% below 2015 levels. Exchanges were down 7% vs the prior three-month period with transactions down 11.5% year on year and 7.3% below the pre-pandemic levels.
New Instructions are running 3.3% higher annually and almost all the homes sold were at a discount. The super prime market is notably weaker as the buyer base (originally foreign) is now domestic, with instructions down according to Lonres by 30%, transactions down by 20% and properties going under offer also down by 50% year on year.
In contrast to this, the lettings market is working – Lonres recorded a 5.5% increase in rents in July – the strongest in 18 months. Supply remains tight relative to historic levels with available stock running 14-15% below the five-year average in H1 2026.
The Renters Rights Act has, in our opinion, both been responsible for landlords leaving the market, reducing supply, and leading other landlords to price more confidently.
The blended yield across prime Central London according to Lonres, who have pooled all lets together with the new price points, is 4.40% for Q2 2026 and we expect this to increase as current price and rent trajectories diverge further. This is a far cry from prior years.
TIME TO RECONSIDER BUY-TO-LET?
With the departure of many, in our opinion, it may now be time for investors to reconsider the buy-to-Let market up to the £2m price point.
The tax position in the UK is such that it does not make sense to buy, as a foreigner with assets outside the UK, unless you are investing into the asset class or you are planning a long-term future in the UK, as your horizon before becoming caught in the UK tax net is only four years.
A large part of this wealthy demographic is now renting which makes the asset class more attractive. Why? A 4.4% gross yield is not to be sniffed at as part of a balanced investment portfolio.
The gross dividend on the FTSE 100 is 2.99%, FTSE 250 around 3.5% and the S&P 500 around 1.06%. Capital growth is important, but people need some income and diversification too. Naturally, this is our opinion, and everyone should take their own professional advice.
REALISTIC PRICING REMAINS KEY
Back at home, Maskells continues to be busy. In lettings we have had 17 lets in the past month with an average price point of £1400 per week and seven prospective tenants on average per property.
We could really do with some more stock given the number of applicants we have! In sales we have five properties exchanged and awaiting completion this month, and a further seven moving towards exchange.
The values range from just under £1m through to £6.5m. For many of these properties we have disappointed domestic buyers, so we know there is an active market for realistically priced properties.
And that is the key – there is no tolerance from buyers in this market for overpriced properties.
