Boris Johnson has just been elected as the leader of the Conservative Party and, with a country to run and Brexit to negotiate, he has a big job ahead of him.
As part of his leadership campaign, Johnson made several announcements relating to housing which could boost the market and increase home ownership for many. As former London Mayor, housing policy was part of his core brief so it’s clear that this is an issue about which Johnson is passionate.
We list below some of the key housing policies proposed by the new Prime Minister and what they could mean for home owners in the UK.
- We could see the stamp duty threshold raised from £125,000 to £500,000.
This would mean that all buyers wouldn’t have to pay any stamp duty on properties under £500,000, reducing the cost of buying a home significantly.
- The higher rate of stamp duty land tax could reduce from 12% to 7%.
This rate was increased back in 2014 and has contributed to a marked slowdown in sales in the upper end of the market. Changing the rates back to what they were or similar could see this end of the market regain some movement, and will make it easier for those with higher value homes to sell.
- Stamp duty could change from a buyer’s tax to a seller’s tax.
There could be some benefits to this like helping people to get onto the property ladder initially and helping the market to move upwards. Unfortunately it would have the opposite effect on people looking to downsize, and we could find those owning larger houses reluctant to downsize as a result.
Dominic Agace, CEO at Winkworth, comments:
“Any initiative to free up the housing market is good in our eyes, so we’d be pleased to see Boris Johnson implementing some of his proposals as the new Prime Minister. It seems that his policies are designed to get the market moving, particularly benefitting home movers in London and the South East, where the cost of moving has become a huge sticking point in recent years.
“Raising the stamp duty threshold would, of course, reduce the amount of unfinanceable money needed to purchase a home, while cutting the higher rate tax would be a huge positive for the central London market which has stagnated in recent years due to taxation. We’re optimistic about both of these policies which should allow for more movement at all stages of the housing ladder, in effect allowing for people to get on with their lives. “However, changing stamp duty from a buyer’s to a seller’s tax could cause issues. This is clearly aimed at making moving easier for upsizers but would in turn cause problems for downsizers and empty nesters, who are already reluctant to move and would then have a higher tax to pay to leave their homes. Practically, this wouldn’t work well for the market as we need to encourage these people to downsize to free up accommodation for growing families.”
For further information on the property market in your area, please don’t hesitate to contact your local Winkworth agent.