The lastest reader poll asked, ‘Do you think Boris Johnson’s premiership will be good or bad for your business?’
A further 19.8 per cent opted for ‘no real difference,’ while 18.7 per cent said ‘bad for business’ and 15.5 per cent said ‘I don’t know’.
“I’m surprised there aren’t more of those ‘don’t knows’, because there is a lot of sitting on the fence in the market at the moment,” said Lee Pendleton, chief executive of London estate agency James Pendleton.
“The main thing the property industry wants him to do is to review stamp duty, including for investors, to kick-start the market. Because it’s all very well helping first time buyers, but if you don’t help up the chain, there’s going to be a bottleneck and that’s what we’re seeing.
“Between £1m and £4m, unless you’ve got lots of equity in their property or have to move, you’re staying put. The buyer pool has shrunk significantly. I have a client at the moment who’s buying a property at £2.2m, the Stamp Duty is nearly £300,000. That’s a huge amount of money,” Pendleton said.
The prime minister in June floated a proposal to abolish Stamp Duty for homes under £500k if a no-deal Brexit transpires, and in July it emerged that he was considering switching liability for the tax from buyer to seller.
“I can see his train of thought. If you look at the statistics, £7.2trn is captured in UK housing and only 28 per cent have finance on their property, so the equity is colossal, just over £4trn. It is insane how much money is in property,” Pendleton said.
“But if you’re somebody who doesn’t have equity in your property, how are you going to pay the Stamp Duty? You’re just not going to move,” he said.
Outdated market practices
“We believe Stamp Duty does need a review. The previous regime worked brilliantly. It was fair. As soon as they changed it, all hell broke loose. To remove it for first time buyers would be a great starting point, but don’t create a bottle neck.”
John Phillips, national operations director at broker Just Mortgages and agency Spicerhaart agreed: “Stamp Duty is suffocating the property market. It’s such a huge cost that it’s preventing people from buying their first home or moving up the ladder.”
“But moving Stamp Duty from buyer to selling just moves the problem,” Phillips continued.
“And actually, it would exacerbate the problem we are currently seeing of older people not downsizing because of the costs.”
However, Phillips said: “I am not sure that the housing market is the place for politics. If the government is serious about getting the housing market moving again, it needs to abolish Stamp Duty altogether.”
Pendleton added the whole process of buying a property was “well overdue a review”, that year-on-year increases in leasehold charges were “unaffordable” and that the tenancy fees ban that came in in June had “driven the price of rents up”.
In an aggressive cabinet reshuffle, the new Prime Minister has brought in Esther McVey, MP for Tatton, as housing minster to replace Kit Malthouse and Robert Jenrick, MP for Newport, was appointed secretary of state for housing, communities and local government succeeding James Brokenshire.