It has been a tumultuous few weeks at Downing Street, with the 31st October Brexit deadline looming, controversies over the suspension of parliament and the very real potential for a no-deal Brexit, therefore it’s not that surprising that we have not yet heard too much on his plans for UK housing.
With Brexit paralysis dogging the UK property market, particularly in the South, there does seem to be some good news from mortgage lender Nationwide, suggesting that August saw the fastest annual price rise in three months. However, uncertainty over Brexit continues to dominate buyer and seller actions.
Prior to his appointment, Johnson had proposed several measures which may come as good news for many if indeed they are introduced. We round them up here.
One of the most significant reforms proposed by Boris Johnson are planned changes to stamp duty. Stamp duty has long been a factor that property experts suggest can slow the market, and makes transactions prohibitively expensive for buyers.
Currently stamp duty is payable for any home over £125,000 (except for first time buyers, where there is an exemption up to £300,000), it’s always been a controversial tax. Additionally for investors, an additional 3% on top of usual stamp duty (4% in Scotland) is also payable.
Johnson had initially suggested an overhaul of stamp duty, abolishing it on properties up to £500,000 with rates coming down at the top end too by reversing George Osbourne’s SDLT increases on homes valued at over £1.5 million by reducing the 12% duty to 7%.
There have also been separate discussion around moving the tax from buyers to sellers, where is was reported in The Times that Chancellor Sajid Javid supported the idea (something that he has since denied on Twitter).
A shift from liability from buyer to seller could make buying far more affordable for both first time buyers and those wishing to move up the property ladder, though critics suggest that this would put of others wishing to downsize.
In an interview which took place prior to his appointment, Johnson stated that building on brownfield sites across the UK, would be one way that the government would seek to achieve its housebuilding targets, which still includes creating 300,000 new homes each year until the 2025.
His comments within the articles suggested that more provision is made for first time buyers, offering alternative ownership options such as shared ownership.
Higher Tax Threshold
While not directly related to housing per-se, Boris Johnson has also indicated a commitment for raising the thresholder for the higher rate of income tax from £50,000 to £80,000.
According to estimates by the Institute for Fiscal Studies (IFS), this would deliver a £9 billion tax boost to 4 million people and benefit the top 10% of earners to the tune of almost £2,500 a year. This would also free up a great deal of investment capital which could have a stabilising effect on the economy if Britain were to leave the EU without a deal come 31 October 2019.
Whether these pledges go ahead, and in which form still very much remains to be seen, however with the Brexit deadline looming, and the autumn statement date not yet announced, we remain hopeful that, once the government begin to turn back to tax and housing policy, the news will be good for the UK property market.