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Business Comment

Anthony Hilton: Foreign buyers must face some home truths

House prices rose in some parts of the country and fell in others, leaving the overall picture unchanged, according to the Office of National Statistics. As usual, London and the bits close to it inched ahead while most of the rest of the country sagged. But volumes are low and enthusiasm muted so there was not much out of the ordinary.

What was different, however, was that figures for Kensington and Chelsea edged down — almost imperceptibly, it is true, but worth noting for all that, because it is the first time in months, if not years, this has happened.

Something must have curbed the flow of foreign money which drives this section of the market. Those in the trade have no doubt what that might be. They blame George Osborne and specifically his measures in the last Budget to make it much harder for foreign buyers to avoid stamp duty by channelling the purchase through an offshore company. This, said one over- excited agent, had brought political risk centre-stage for buyers of London property and as a result interest had dropped sharply.

We live in an odd world where asking foreign buyers to front up the same taxes as UK-based citizens are required to pay gets classed as political risk.