Pressure continued to mount on the government to clearly address the issue of stamp duty as a leading business consultancy suggested a switch of SDLT from buyer to seller could offer short term relief to a house price fall triggered if there’s a No Deal Brexit.
KPMG says UK house prices could fall by an average of more than five per cent if Britain crashes out of the EU without an agreement next month - and n some regions the drop could be as high as 7.5 per cent.
Even a drop of 10 per cent to 20 per cent is “not out of the question” if the market overreacts.
“A no-deal Brexit will see household finances more under strain, with any rises in earnings likely to be more subdued and higher inflation depressing their purchasing power even further” says KPMG’s chief UK economist Yael Selfin.
She continues: ”Add to that a rising unemployment rate and an overall decline in confidence as a result of the initial disruption, [and] you can see why people would hold off making any major financial commitments, which would trigger a larger correction in house prices.”
The KPMG report also notes that, if a deal were to be agreed by the current October 31 deadline, house prices would stabilise this year and rise 1.3 per cent in 2020.
However, the KPMG study says that a switch of stamp duty from buyer to seller - a plan he appeared to support at one time during his recent Conservative leadership bid - could provide short term relief to the market as transactions would pick up.
The absence of clarity on the government’s stamp duty plans - after what appeared to be hints about reform not only from the Prime Minister but also from the Chancellor and the Housing Secretary - is being blamed by some market analysts for a slow start to the autumn sales market.
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What an absolute pile of cob-sh*te, good job its not printed as it would be the waste of a former tree's existence.
Either way it is dressed up, the buyer always pays, either separately via a payment via the solicitor or rolled into the price of the property.
Is this what has become of this country? is there anything worth reading that doesnt include Brexit?
I haven't found it yet!
Does Yael Selfin imagine that the sellers will pay the stamp duty without putting the price of their homes up? The only way switching the responsibility for passing stamp duty could have an impact on the market is if it becomes a discount on prices. That isn't what is proposed and it is very ignorant of this chief economist to imagine that's how seller's would behave. Nor would it be right for the government to impose a property discount on sellers. They just wouldn't sell so the market would stagnate.
As sellers would put up their prices to cover the tax, that could also slow down the market.
Banks will be opposed to the change because it decreases the value of their existing security on property by the stamp duty percentages, which would decrease the amount they could lend as their gearing would be damaged. Lack of funding could stall the market.
This doesn't say much for KPMG of this is the thinking of their chief economist. Heaven help us all if that's the best such a leading accountancy can come up with!
great point on the valuation of the property, we are already suffering from properties being valued lower than what they are sold for.
If the last twenty years of government would just stop meddling with the property sector, the open market might just have a chance...drop SDLT back to 3% on all transactions over £500,000 and be done with the whole stupid issue.
The only person it will affect are older people going into care or those moving with a job and renting; all others will make no difference other than put the stamp duty on the selling price. It just needs slashing, not moving.
The only person it will affect are older people going into care or those moving with a job and renting; all others will make no difference other than put the stamp duty on the selling price. It just needs slashing, not moving.
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