So what does the latest budget mean for prime London property prices? Well in the first instance it meant that I had to endure an hour of watching politicians bray, heckle and generally behave like five year olds. All hugely reassuring… But what did George say? Well, there has been some tinkering and a couple of policies that are being described as bold.

My thoughts:

The Right to Buy policy is cretinous and is effectively selling tax payer assets on the cheap.

Meanwhile, the Help To Buy ISA is not particularly smart from an economic perspective but will help to buy a few votes. In reality it will help a few people get onto the property ladder but will push prices up at the bottom end. How then will the next generation of buyers get onto the ladder?

Basically they are headline grabbing policies which will garner a few votes but are ultimately tinkering at the edges. For London the changes to the Non-Dom rules will send a shiver down the spine of many people. We don’t have the details on the changes yet but I expect that they will actually only affect a relatively small number of non-doms. As this will not be phased in until 2017 it will give those affected the opportunity to organise their affairs so I imagine there will be a number of very happy tax advisors!

Please note that although there are estimated to be 114,000 non-doms in the UK, only about 30,000 are regarded as HNWI’s. For example, foreign nurses have non-dom status. How many of that 30,000 will be affected by the changes remains to be seen, but I don’t expect this to be serious for London property prices. The Non-Dom legislation will still be very attractive.

In fact the changes Osborne has suggested seem pretty sensible and it is nice to see a government use a laser to refine what is an otherwise solid piece of legislation rather than their preferred instrument – the wrecking ball.

The biggest surprise, however, is the change to mortgage relief for buy to let investors. This certainly helps to level the playing field for first time buyers, but I am sure that this will cause serious problems for those investors who are overleveraged. Fortunately the government will also wait until 2017 to introduce these changes so those who have overstretched themselves will have time to unwind their positions. Of course an unintended consequence of this policy may be that landlords simply decide to increase the rent to make up for the shortfall. This will certainly be a realistic option for many as the economy improves.

Consequently I don’t expect this policy to have a negative effect on prices on the whole.

However, many large developers will be worried especially those who have been targeting overseas’ investors as their main source of buyer. The cumulative effect of introducing CGT for international buyers, higher stamp duty and this new policy which will be perceived as “an attack on investors” means that deteriorating sales figures will continue.

As you know, I have been advising my clients for the last 18 months to avoid high density new-build developments as I see a high probability of price falls.

If you have not received my report on this, then please email [email protected] and we will have it sent to you.

So on the face of it the budget does not seem particularly helpful or disastrous for the London property market. However, this doesn’t tell the whole story. For all the headline grabbing noise of non-doms and levelling the playing field for first time buyers – this is pretty small fry.

In fact, the most important announcement for London and UK property prices does not appear in the housing section of the budget. No, the key point is the news that corporation tax will be reduced to 19% and then 18% - the lowest rate in Europe apparently. This will attract a vast amount of investment from international businesses. This can only have an upward effect on land prices which in turn will feed into higher house prices. This inflow of money will dwarf any outflows caused by the changes to the non-dom legislation and mortgage tax relief.

The economy is already outperforming so this should increase momentum which in turn will lead to greater credit generation in time. Remember house prices have been going up while the amount of mortgage debt. This is a positive signal although the effect of SDLT increases should not be underestimated at the top end of the market.

In addition the inflow of pension money has yet to really take place which will boost prices at the lower end of the market, so expect to see it outperform over the next couple of years. But I couldn’t possibly end on a wholly positive note; you might think I was losing my mind. My favourite quote of the Budget: “We have turned a corner and left the age of irresponsibility behind!” – Cue lots of braying from the Tory benches.

Unfortunately George forgot to add “For now”. The property cycle is following its natural course. In time credit terms will be relaxed as the old lessons are forgotten. This will boost prices and lead to the next great bubble. The ensuing crash could well make the last one look like a tea party. However, this is a few years away in my opinion (with the notable exception of many new developments).