In a final plea ahead of next week’s Budget, Banda Property CEO Edo Mapelli Mozzi highlights why Philip Hammond should not waste this opportunity to reform the stamp duty charges that have crippled the UK housing market:
“In the Government’s own words “the housing market is broken”, but so far they seem to have little appetite to try and fix it. Both the Autumn Statement and last month’s long awaited housing White Paper failed to offer anything decisive to reverse the catastrophic effect of George Osbourne’s 2014 SDLT reforms which, nearly two and a half years on, have lowered tax receipts overall and had a more devastating and far reaching impact than could have ever been anticipated.
“It may have been intended as a tax on the very richest, but in fact stamp duty reform has caused significant harm to the lower end of the housing market, including first time buyers and the vitally important Build to Rent sector.
“Lower transaction volumes and development in the south-east means fewer affordable houses or payment being provided for affordable housing. There are fewer units being built overall. Institutional investors are deterred from Build to Rent opportunities. Downsizers are trapped in their homes. And Britain, as it faces its toughest ever test to keep big business on these shores while the French Presidential candidate Emmanuel Macron gleefully tempts UK talent to the continent, is stifled by a property tax regime that makes it one of the most expensive places in the world to buy a home.
“There are three key changes Hammond could make that would have an immediate effect. Firstly, exempt first time buyers from STLD altogether. Secondly, abolish the 3% surcharge that is suffocating the build to let market and reducing transactions. Finally, lower the top rates of SDLT as the hike from 5% to 10% at £925,000 is counterproductive. By adjusting these brackets and re-energising this section of the market, funding will increase, housing starts will rise, the market will start moving again and tax receipts for the treasury will recover.”