Our Chairman, Nick Leeming, shares his insight on Chancellor Philip Hammonds stamp duty announcement in the Autumn Budget:
It may have been a long time coming but Chancellor Philip Hammond has finally addressed the UKs call for stamp duty reform, with the prohibitive tax abolished immediately for first-time buyers purchasing properties worth up to 300,000. To help those in London and other expensive areas, the first 300,000 of the cost of a 500,000 purchase by all first-time buyers will be exempt from stamp duty, with the remaining 200,000 incurring a 5% tax.
For those first-time buyers who have been struggling to save enough to take their first step on the property ladder, this is a positive step in the right direction, particularly in addition to recent boosts from the Governments Help to Buy scheme. In the most expensive parts of the country a typical first-time buyer home can attract a stamp duty land tax liability as high as 10,000, money that can now be entirely, or in large part, ploughed into a deposit or spent on making essential renovations in the vast majority of cases.
However, I do feel the Chancellor has missed a trick by failing to reduce stamp duty levels across the board and his decision to cut stamp duty for first-time buyers was more of a quick fix, as opposed to a long-term plan to help mend our broken housing market. High levels of stamp duty, particularly to the top end of the market, caused sales levels to fall by 8% in the last financial year, according to the HMRCs Stamp Tax Statistics 2016 2017.
This fall in market activity can no longer be ignored and the Government must view the property market through the eye of the homeowner particularly now The Bank of England has announced an interest rate rise. First home owners generally want to move up the ladder, to larger homes as their circumstances change and families expand. Stamp duty levels have acted as a brake across the entire market, preventing the likes of downsizers and second-steppers from making their moves. It is therefore very disappointing to have not seen a more comprehensive stamp duty reform, which would have inevitably increased overall fluidity to the benefit of all buyers.
