The policies being discussed by Labour’s leadership rivals will damage investment, accelerate landlord sell-offs and keep mortgage rates higher for longer, warns Knight Frank.

Recent comments from Andy Burnham and Wes Streeting, it says, show they are increasingly seeking to demonstrate their “soft-left credentials” as they try to win the votes of party members and union backers.

Burnham has backed proposals for an additional council tax levy on overseas owners of homes worth more than £2million, while Streeting has argued Capital Gains Tax rates should be aligned with income tax.

Tom Bill (pictured), Head of UK Residential Research at Knight Frank, says the property tax debate “is not helpful for a country trying to attract global talent and investment”, warning the proposals risk sending further negative signals to international buyers and investors already unsettled by the abolition of non-dom status and higher Stamp Duty costs.

The UK needs to demonstrate it is open for business.”

Leslie MacLeod-Miller, Chief Executive of Foreign Investors for Britain, says: “The UK needs to demonstrate it is open for business and wants to attract talent on a competitive global stage. It’s either a question of growth or tax.”

Meanwhile, Bill adds: “The bond markets are already pricing in risks linked to the prospect of a “soft-left Labour government.”

Tax and spend

He says growing concern about higher borrowing, taxation and spending, combined with financial pressures linked to the Middle East conflict, was contributing to expectations that mortgage rates could stay higher for longer.

He is also warning that Streeting’s proposed Capital Gains Tax changes, alongside the Renters’ Rights Act and tougher Minimum Energy Efficiency Standards, would provide “another reason for landlords to sell” and that further landlord exits would reduce rental supply and place additional upward pressure on rents.

The latest data from LonRes shows prime central London is already showing signs of strain.

During the first four months of 2026, exchanges above £5million were 18% below the five-year average, while average prices in the market fell 3.8% annually in April and are now 22% below their 2015 peak.