text: Labour's plans to change rules allowing wealthy foreigners to lower their tax bills is causing London property deals to fall through and homeowners to sell up, estate agents have claimed. Ed Miliband initially suggested he would 'abolish' the non-domicile status on Wednesday should his party take power in the General Election on May 7, but it later emerged he is effectively proposing a time limit on it of between two and five years. Although Labour aides suggested this would raise as much as £1billion, it seems the announcement has already had a negative impact on the capital's property market. Scroll down for video . Rule change: Ed Miliband joined crowds in Warwick, where he announced his non-dom plans on Wednesday . Non-domicile status allows people living and working in Britain to only pay tax on their UK income, but not earnings from overseas. Ed Mead, executive director of London-based estate agents Douglas & Gordon, said there has been a huge increase in valuations because of Wednesday's announcement - 37 in a month compared to the usual figure of about six. Speaking to MailOnline, he said: 'These are people who are saying "we have finally had enough and we are going to value with a view to selling up and leaving". 'These people spend a lot of money in the economy. I do very much fear for the top end of the market.' It's claimed the announcement has already had a negative impact on the capital's property market . Mr Mead, who has been working in the London property market for 35 years, explained it's not just the top end that will be affected. He added: 'The London market is unique - it's pulled from the top up. 'If you cut strings that's holding the market up, everything else falls down.' Charles McDowell, an independent agent hired by rich families in the capital, told the Financial Times that two deals he was involved in had fallen through this week because of Ed Miliband's non-doms plan, while two families asked him to sell their homes. He told the paper: 'My clients feel under attack, they are not going to invest in London any more.' Non-doms must prove that they regard a foreign country as their real home, but Mr Miliband argues that the tests 'are not very rigorous' and can be granted to people who have a burial plot or property abroad. Newspaper reports suggested that non-dom rules would be scrapped by Labour altogether. But  it emerged Labour would allow 'real temporary residents' to take advantage of the rules - with the time limit to be consulted on. Luxury property: Ed Mead, executive director of London-based estate agents Douglas & Gordon, said there has been a huge increase in valuations because of Wednesday's announcement . One Hyde Park: Mr Mead says he fears for the top end of the market but 'if you cut strings that's holding the market up, everything else falls down' In his speech, Mr Miliband said that everyone who has made Britain their permanent home should pay full UK tax on all their income and gains. 'It is not fair. It is not just. It holds Britain back. We will stop it. The next Labour government will abolish the non-dom rule,' he said. The Tories pointed out that a five-year grace period would exempt up to six in every ten non-doms from the crackdown anyway, because many do not stay longer than five years. Tax advisers say driving non-doms away would in fact cost the Treasury significant sums. With non-doms paying around £8billion in tax and national insurance a year, it is claimed that Labour's proposal could in fact create a huge hole in Treasury coffers. Within hours of announcing the policy, Shadow Chancellor Ed Balls was forced to admit he did not actually know how much extra cash the measure would raise. In a further embarrassment, it later emerged that just three months ago he himself had said such a move would be counter-productive – saying it would result in the country losing money. In a video that emerged yesterday, Mr Balls can be seen telling a local BBC radio station that abolishing the status altogether 'will probably end up costing Britain money because some people will leave the country'.
target: Labour plans to change rules that allow foreigners to lower their tax bills .
  Non-doms only pay tax on their UK income, not earnings from overseas .
  Estate agents claim non-doms are selling up and deals are falling through .