Chancellor Philip Hammond will deliver his first Autumn Statement on November 23 and there is one policy on the lips of most of the property industry, Stamp Duty.
Many have already called for a scrapping of the additional rate on second properties, but now Hammond is facing calls for exemptions for certain buyers.
Rob Ellice, founder of online agent easyProperty, is calling for buyers to be spared Stamp Duty on purchases below £250,000.
He said: “Osborne had the foresight in the recession to increase the threshold to £250,000 for first-time buyers to help prevent a market freefall.
“We are now, again, on the cusp of economic and political uncertainty as a result of Brexit, and I believe we need to encourage property investment – by home owners and institutions – by upping this threshold once again.
“A lot has happened in ten years and this would be a shot in the arm.”
He is also calling on the Chancellor to create tax incentives for the institutional Build to Rent sector.
Toni Smith, sales operation director for LSL brand First Complete, is calling for Stamp Duty thresholds to either be increased or for an exemption for first-time buyers.
He said: “The Government should help first-time buyers to get on the property ladder by increasing the threshold or indeed making them exempt from paying Stamp Duty on house purchases up to a set value.
“The threshold for Stamp Duty exemption for first-time buyers would of course need to reflect regional differences in property values across the UK. Clearly, the market in Hampstead is different to the market in Hull.
“Life isn’t getting any easier for most first-time buyers and the end of Help to Buy, rising inflation pressuring wages and a falling pound – which may make UK property hotspots more attractive for overseas investors – aren’t going to improve things any further.
“The market would benefit from a stimulus at the lower end to give first-time buyers a leg up on to the ladder. The simplest and most effective way to do that is by reviewing Stamp Duty for this population.”
Using shared ownership as an example of how an exemption could work, Smith said: “After all, shared ownership buyers with a share of a property worth below £125,000 are already exempt.
“There is no reason that the same principle cannot be applied to first-time buyers across the UK, who are unlikely to own a large share of their property – often just 10%, with 90% being owned by the lender.”
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I bet there are no changes to stamp duty!
Council planning departments have been stripped to the bone and the governments solution is the give an additional £18m if pathetic!
You can’t just speed up the process overnight…You need to recruit skilled (I use the word loosely) planners first.
Phillip Hammond needs to do a lot that George Osbourne failed to do..
Speed of obtaining planning permission is top of list because tenants are being punished with ever increasing rents in the meantime!
He needs to encourage landlords into the market not to discourage them..
The mark of great leadership is to recognise mistakes and change them but we a not governed by great leaders!
Most are clueless robots!
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Both of these calls from Ellice and Smith are frankly pretty unimaginative
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Why do people always call for Stamp Duty to be reduced at the lower end of the price ranges?
I would say certainly “down South”, that it’s actually the market up to and over £1.5M that has effectively been obliterated by Stamp Duty levels. We are seeing less UK home owing buyers wishing to purchase in that price range and therefore they are are not selling the smaller properties required to keep the aspirations movers market turning over.
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I am beginning to think FTB’s don’t even see buying a property as an option at all. My niece has moved back in to her mum’s house in “Norff” London hoping to save up enough money for a deposit. She is 30 ! Her fiancé will no doubt want to start a family soon too. London prices plus stamp duty means it’s may just be a pipe dream. Yet when I was 23 (a very, very long time ago) I bought a property as nearly all my friends did with relative ease.
Stamp duty relief up to £250K is probably only scratching the surface of what needs to happen for FTB’s in London. It could take years for the London market to reflect the actual London salaries and not the over sea investors.
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Section 24 is the bigger threat and is retrospective. At least with stamp duty you make that decision before you buy. Section 24 means that thousands of landlords will be dealt a harsh blow by changing of tax status on property already owned. Its not as if previous Governments encouraged people to invest for their future and not become reliant on the state……oh no wait.
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I reckon it will be VERY LOW on the list of priorities with everything else like Brexit etc Can you imagine President May explaining that they are reducing the tax on moving for the rich to the electorate (by rich I mean those who can afford to buy a house) Remember the national average house price is still just over £200k…she wants to be seen no longer as the ‘nasty party’! A mandarin will also argue that all that lovely revenue can be used for other causes…until they realise the volumes are dropping and it wont be the big cash cow that it has been.
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Osborne satisfied the property market – in part – by removing the slab system of stamp duty; but ruined vast swathes of the market in the South East & London by increasing Stamp duty to 12/15% on the basis that ‘too many foreigners’ were buying. This was true in part, but purely a popularist move and not remotely clever. We now have a seriously unbalanced property market. Hammond will look at the total capital receipts from Stamp duty and may tinker with it, but reducing taxes in this climate is politically difficult. The bottom end of the market is performing well – so expect nothing at all there. Hammond has always said that a healthy economy relies on two factors – a vibrant housing market and a successful retail sector. Not sure we have either.
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Most of the BTL on our patch are people trying to do something with a lump sum to make it work for them, inheritance mainly, getting <1% in the bank doesn’t sit well with inflation not only higher than that now but projected to rise through the Brexit fallout, where people have inherited money it’s usually parents or granparents who have expired so recipients are generally in their 40s-70s and property has treated that generation well so they trust it, they also like the fact that they can kick it rather than just digital numbers on a screen if they invest in the stockmarket, these buyers perceive the 3% uplift as an unwelcome cost of business but it doesn’t seem to be a deal breaker and where they are at the older end of the range the 40% tax grab doesn’t bother them either. Good landlords actually.
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This is direct from the V Property Think Tank…..it will never happen because it’s long term joined up thinking… I also know it’s controversial, but it’s based on the fact that if we drive hundreds of thousands each year of what would have been First Time Buyers in the past into permanently renting (because they can never save enough money to catch the market up and buy) …..who will pay the rents when they all retire (and they have poorer pensions and don’t own their own home)…….this is a huge financial catastrophe building up for the welfare state in the future. So here are my suggestions;
1). Have a special 40 year mortgage with an initial 5 year fixed interest rate, at say 2%, available to first time buyers where they can borrow up to an amount equivalent to the average monthly rental for a two bedroom property in the area they are buying, where they can demonstrate a savings record or a rental payment record of that amount or more. So for example If they had been paying £700 per month rent or regularly saving that amount without problem for over a year, they could borrow in excess of £200,000 towards a house purchase (by my calculations £200,000 would be just over £600 per month). The scheme should be restricted to properties upto £250,000 only (unless planet London) and no stamp duty apply.
2). Free up pockets of land, currently not available for development, on a restricted basis. I am sorry, but we are going to have to accept development of some small areas of ‘green belt’ at some point. This would be on a licenced basis with only first time buyer homes under £250,000 and bungalows aimed at older buyers (rather than 4 bedroom detached properties aimed at families) being permitted. The landowners would have to accept a restricted price (the benefit to them being that they still have a far more valuable saleable asset) somewhere between agricultural and full building permission land prices….to keep overall development and final price of properties down….thus making this kind of development viable. If they won’t accept the restricted price…then there is no licence to develop the land.
3). Building bungalows will help alleviate the ‘larger property blocking’ problems where residents are stuck in houses too large for them, but cannot find appropriate properties they wish to downsize to. This should then free up many more family homes for sale.
None of its rocket science, but I doubt anyone will listen.
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