A new and comprehensive analysis of the housing market shows a jaw-dropping collapse in stamp duty revenue going to the Treasury as a result of transaction volumes falling away - and the blame is being put on Brexit.
Investment consultancy London Central Portfolio has looked at transaction numbers and stamp duty payments across England, Wales and Northern Ireland, and has drawn some damning conclusions on the impact of stamp duty and related property taxes.
Firstly it reveals that in the first quarter of 2019 in England, Wales and Northern Ireland stamp duty receipts fell by 26.2 per cent just in three months.
They now stand at £1,757m, which represents a drop of £623m since the final three months of 2018.
Meanwhile transactions in England, Wales and Northern Ireland fell 21.4 per cent in Q1 2019 compared to the previous three months, and now stand at 237,240.
Receipts from the Higher Rate for Additional Dwellings - that’s the formal term for the additional three per cent stamp duty surcharge on buy to lets and second homes - fell by 24.6 per cent in the first quarter of this year to £372m.
This is because transactions in those additional homes dropped by 14.7 per cent to 54,160.
First time buyers’ relief transactions have fallen by 23.0 per cent with only 46,800 claiming relief of a total of £110m, a fall of £34m for the same periods under review.
Naomi Heaton, chief executive of London Central Portfolio, pulls no punches. ”Seasonality will have played a part as it traditionally takes a few weeks for buyers and sellers to get going after the festive period. However, there is no doubt which external force is having the most destructive impact on the UK housing market, and that is Brexit” she insists.
“This will make uncomfortable reading for the Exchequer, as the continued downward trend of falling receipts will be creating an ever-growing hole in the UK’s balance sheet” she adds.
“The Chancellor confirmed his intention to introduce an additional one per cent levy on purchases for overseas buyers. One would have thought that with Brexit looming he would be doing everything within his power to emphasise the fact the UK is open for business to the overseas investor. It appears that he has not learnt from the previous chancellor’s mistakes” suggests Heaton.
And she concludes: “With the recent extension to the UK’s departure from the EU, it is unlikely that we will see any material change to the status quo until our politicians can start pulling in the same direction, whichever way that might be.”
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People won’t sell an expensive property in London and buy another one, it’s too expensive to make a sideways move. 16% with the overseas premium is daylight robbery and it’s effect trickles down. Taxes on aspiration are regressive, a Conservative Government orchestrated this disaster, it beggars belief
A mess of the Governments own making. Brexit isn't the only cause. There are other issues that affect the market. Where is the encouragement to buy? There will be a mass exodus from the market by investors. If they have first time buyer buys the property then no Stamp Duty? If investors wont buy then no higher rate Stamp Duty. It isn't rocket science this!
There are of course exceptions regarding transaction levels.....in 17 yrs of selling houses we've never had so many properties under offer as we do now.
Sometimes these headlines make no sense at all !
The losses are completely due to London property, the country's biggest SDLT revenue earner, and that is completely due to the prohibitive expense of the raised SDLT. This downward spiral started in 2015 and every agent of any standing in London has lobbied the various MPs who apart from Greg Hands and a few others, are frankly asleep at the wheel. Brexit is merely the cherry on the cake.
They will blame Brexit, but in reality, it's been their pathetic assault on home owners and landlords. As if anyone needs more proof of the incompetent idiots in parliament.
Brexit isn't to blame, stamp duty increases for additional properties has seen significant drops in BTL and 2nd home ownership, in addition, tax changes and relief on interest for mortgages has ensured a lack of buyers for BTL. This has a knock on effect for those sellers looking to move up market which is one reason why transactions have slowed down because there are less buyers willing and able to purchase. The Government made these various changes to give FTBuyers a chance to buy these so called BTL properties ( first type homes) which was a big failure in the Plymouth because salaries are low but the cost of living is high in this area. Disappointingly, whenever the Government make such drastic changes, they do so because of what may be happening in certain areas of the county but each area has its on economical and geographical challenges. I would welcome the scrapping of SDLT for additional homes whether they are for investment or personal use, this would help stimulate the market place but the Government doesn't listen to experts in the world of Estate Agency.
Government are thick useless money grabbing stupid bods, not a clue about professional B2L. Brexit has not caused the problem ,1 billion down on SD increased stupid silly regs
Absolutely it is NOT Brexit. But they always blame it on Brexit anyway. The Govt wants the investor to put less money into property and follow Germany's example of investing more into manufacturing and business. Hence the rediculously high stamp duty rates and huge damage to UK economy. George Osbourne got this very wrong. Stamp duty should at least be halved. But dithering Maybot has not got a clue. When she has gone (the sooner the better) we might get someone with some common sense to right all these wrongs and get one of the biggest drivers of the UK economy back on track. But if Marxist Corbyn gets in forget it, will only get worse.
It's lack of Government understanding, BUT it could be a lot worse (e.g. J Corbyn). The number of BTL Properties will become fewer and the rents will become higher. As Housing Ministers are churned regularly, they just follow their brief without really understanding what it's all about. The Treasury has far more input on the PRS.
After Brexit, whoa! - don't count on it happening on Haloween as there's sure to be a scare - we'll still be suffering just the same and the excuse will look as pathetic as it does today.
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