In his campaign to become Prime Minister, Borris Johnson talked about reforming stamp duty, a proposal which has been welcomed by many in the Real Estate sector.
However, a lack of firm details and the uncertainty resulting from that is fuelling a potential housing disaster in the UK. Rebert Jenrick, the Secretary of State for Housing, has adopted a “wait and see” attitude which has further fuelled speculation.
Mr Johnsons proposed changes to stamp duty are to increase the threshold after which stamp duty is applied to residential properties from £125,000 to £500,000, and additionally to reduce the top rate from 12% down to just 7%.
Ian Bythell, Director at Petty Real, gave the following analysis:
“If it happens it will be good news indeed for the industry because it will give a much needed boost to the market. But we really need concrete information. Without reliable information we might see people delaying buying or selling a property in the hope of paying lower stamp duty in the future and that will be strong blow to the industry”
Mr Bythell is not alone in his evaluation. In an open letter to Borris Johson, Simon Gerrard, President of the National Association of Landlords, condemns the lack of resolution from the government which is causing people to wait before making a purchase and so causing “downward pressure on prices and transactions”.
Chancellor of the Exchequer, Sajid Javid, has also hinted at a change to stamp duty which would reverse the burden of stamp duty from the buyer to the seller. Gerrard commented:
“Such a change would be strongly positive for the housing sector because under current stamp duty people are effectively being taxed on their aspirations.”
With the budget day of fast approaching perhaps the uncertainty will soon be resolved.