A veteran agent says the new government’s Budget, expected in the next few weeks, should not provide too much help to the London housing market.
David Alexander, who 37 years ago started a family company - DJ Alexander - that has since become one of the country’s largest property management firms, says there would be a side-effect of a Budget that helped the capital.
“It’s vital … that there are not too many giveaways in the Budget aimed at kickstarting the housing market in London. A £500,000 starting threshold for any Stamp Duty and Land Tax, for example, would be helpful in the over-heated market of London and the South East but would create a two tier market which would effectively collapse the Scottish property market.”
He says Scotland’s equivalent of stamp duty - known as the Land and Buildings Transaction Tax - would in that case be substantially higher than SDLT in England.
Scotland would then, he says “become too expensive to buy compared to the rest of the UK.”
Pressure has been building on the Boris Johnson government over the festive break to act on its election pledge to reform stamp duty.
“In the lead up to Boris being elected Prime Minister, he spoke widely about stamp duty cuts for UK residents, yet this quickly fell by the wayside as he settled in to Number 10” says Nick Leeming, chairman of Jackson-Stops agency.
“Our latest research found that 41 per cent of consumers think there should be a wholesale reduction in stamp duty across all price brackets, while more than a quarter think government should abolish stamp duty on all homes under £500,000. Just three per cent felt no change was required, which highlights the need for change” he adds.
Meanwhile Fraser Slater, chief executive of property finding agency Ludgrove Property, comments: “Stamp duty remains a millstone but one that is not without hope. Although an increase in stamp duty for overseas buyers was mooted in the Conservative manifesto, we are somewhat sanguine that stamp duty may be reduced for domestic buyers in the February Budget.”
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'Top agent'.
If and it is a big if - there was a 500,000 divide, caused by a new stamp duty band, then that would also mean that property worth £500,000 to £530,000 will be consigned to a sale price of £500,000 a big chop of equity for anyone caught in this space gone for ever. Stamp duty, like the laws of physics often has an equal and opposite reaction.
My advice - leave the property industry to those who know more about it than the government. It is also worth commenting though, the UK property market is worth about 6.5BN annually, and stamp duty revenue is 16BN. So which is the dog and which is the tail.
There's a simple solution to Scotland being competitively disadvantaged if Stamp Duty is cut in England, - just cut the rate in Scotland!! ... The rates for Homebuyers in London and the South East are absurd! ... Just make the Scottish rates equally less absurd.
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