Boris Johnson wants "absurdly high" stamp duty to be ...

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13 August 2018

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By Graham Norwood

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Boris Johnson wants "absurdly high" stamp duty to be cut

Boris Johnson is calling for a cut to Britain’s “absurdly high” stamp duty.

Writing in this morning’s Daily Telegraph - the same newspaper in which he wrote his infamous burka comments a week ago - Johnson says there will be an impending crisis of capitalism if young people are not able to get on to the housing ladder in greater numbers.

He writes that he believes a more mobile housing market, with a higher turnover facilitated by lower stamp duty, would encourage more first time buyers.

“It is not just that things were so much easier 30 years ago when I left university and went looking for a flat. It was only 10 years ago, for heaven’s sake, that the proportion of owner occupiers among 25 to 34 year olds was still up at 64 per cent.

“That figure has now plummeted to 39 per cent - more than half the key generation shut out of the housing market.

“This is meant to be Britain, the great homeworking democracy, but we now have lower rates of owner occupation for the under-40s than France and Germany.

“That is a disgrace” he concludes, saying it is of little surprise that young people may give up on capitalism if it excludes them from housing.

Ironically his comments about first time buyers come just two days after the Halifax showed that the number of first-time buyers in Britain had hit a 12-year high, despite the national average deposit now exceeding £33,000.

It says that irrespective of the apparent problems in the wider housing market, the number of people taking their first step onto the property ladder hit a new high in the first half of this year at 175,500 - coinciding with the government’s de facto scrapping of stamp duty for many FTBs, and the continuation of the Help To Buy programme.

This is the third consecutive year that first-time buyer numbers have topped 150,000 in Britain, more than double the record low of 72,700 in the first half of 2009 following the financial crisis.

But the record - in 2006, a little before the global financial crisis - is still well out of sight at 190,900.

First-time buyer numbers have risen 21 per cent in the past decade according to the Halifax, which uses its own housing data, earnings figures supplied the Office for National Statistics and mortgage and deposit data from UK Finance.

The most affordable areas for FTBs are in Scotland, which has eight out of the 10 most affordable local authority districts. Pendle, Lancashire and Stirling, Scotland are the most affordable areas with average property prices at three times local annual average gross earnings at £97,387 and £143,148 respectively.

At the other extreme, the 10 least affordable local authority districts are in London. Brent is the least affordable, with the average price of £478,995 being 12.7 times gross average earnings.

Deposit sizes have increased on the back of higher house prices. The average price paid by a first-time buyer has risen from £172,659 in 2008 to £208,741 today.

The average first-time buyer property price in London has seen the greatest increase, up 48 per cent, during the past decade to £419,608, followed by the South East, up 37 per cent to £210,639.

Relatively modest price increases were seen in the north, up eight per cent, and Wales at nine per cent.

By contrast, the average first-time buyer price in Northern Ireland is a third lower than in 2008, down 33 per cent to £124,035 and the lowest in Britain.

The average age of a first time buyer now stands at 31; in 2008 it was just 29. In London it has grown from 31 to 33 over the same period.

Russell Galley, managing director at Halifax, says: “Despite these increases, the number of first-time buyers continues to grow and is nearly back to the peak seen of 2006. Government measures, such as Help to Buy, and record low mortgage rates continue to make buying more financially attractive than renting, with savings of £900 a year.”

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- David Gibbs
- 13 August 2018 14:06 PM
I am pretty sure that a lot of would-be London First Time Buyers and having to buy out of London to be able to get on the ladder. Speaking as a Greater London agent the numbers of FTB's are way down.

- James Walsh
- 13 August 2018 15:03 PM
The number of FTEs is way down because prices are completely out of whack with incomes. Why does everyone find this so difficult to understand? It isn't the fault of SDLT, Brexit, political uncertainty, or Jack the Ripper. It is the fault of Mark Carney for inflating a giant bubble, and to the greedy and entitled Baby Boomers and their estate agent partners in crime who are doing all they can to keep prices sustained for as long as possible.

- James Gibbs
- 14 August 2018 16:55 PM
James are you in property or a politician? It's always been tough for first time buyers. Prices might appear cheap in the previous decades but what were we earning? 1960's £20 a week, 1970's
£100 a week, now ££!!!!!????? Of course we have to, as an industry give FTB'S sympathy, but make it too easy for them and what will prices do? Soar of course. SDLT is the main culprit. Too much tax stifles everything. Halve the tax, double the transactions and revenue stays the same. Plus all the other spin offs, which i can happily explain if you don't know. George Osbourne made a big mistake, but as the Gov't gradually and slowly analyses its figure's it will know that these taxes are ludicrously high and must make changes. Halve SDLT and Gov't revenues will grow.