Letter: Miliband's mansion tax will have major knock-on effect

The first is that there is a £17 billion gap between Labour's money generation ideas and Labour's proposed expenditure and a mansion tax will not fill that. Secondly the whole thing is an economic iceberg.

There are many cash poor, asset rich people in London and the elderly are a large part of this. Most have lived in small houses for many years, which were originally bought cheaply. Over the years even small houses are now worth a great deal in central London. Many will have to sell up and move out.

If people anticipate such a tax they will sell ahead of an expected price decline. This will then ripple through the entire national housing market regardless of price or location.

If you look at Shropshire you will see sales volumes are at about half their peak rate. Mortgage lending constraints mean in a lot of cases people cannot move and qualify for the same mortgage as they have now, or even if they qualify they cannot get a mortgage. Add falling house values to that and you have growing negative equity.

Tighter lending controls and much improved credit assessment now mean it's a case of "computer says no". Missed out on the electoral role? Missed a single utility payment? tenants with bad credit? Sorry next customer please.

The Council of Mortgage Lenders has said :"The rules have had some 'unintended consequences', with banks forced to turn down loyal homeowners for re-mortgaging for fear of breaching the new regulations."

People who have to sell will only find buyers at the right price and that will now be effected by a perception of prices falling nationally because the national average house price is dependent on what happens in London.

So the proposed mansion tax is not just for those with £2 million homes, it's a tax for all home owners.

You can only finance an economy by wealth creation and not confiscation.There seems to be no logic or constructive thought to Labour's ideas. Sadly many voters do not see this.

Robin Lloyd

Ellesmere