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Boris Johnson’s signals on rental sector and stamp duty are good news – Young

by: Bob Young, chief executive officer of Fleet Mortgages
  • 19/08/2019
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With Boris Johnson almost a month into his tenure as prime minister the extent of demands on his in-tray has probably hit home – but that should not stop us as an industry lobbying for what is best for our market.

 

In that sense, there have been some potentially good news stories dangled around to suggest Johnson may be looking to make some quick changes.

Or in the case of introducing rent controls to the private rented sector (PRS), we would hope, consigning these suggestions into the dustbin.

Again, Johnson when he was Mayor of London seemed like he was not interested in over-regulating the PRS; indeed he went on record to suggest that more PRS properties were needed and that investors needed to be encouraged to build and provide supply to the market.

That’s clearly good news, and I have the impression that – with perhaps bigger fish to fry – Johnson might be more than comfortable in leaving other, already heavily-regulated sectors, as they are.

 

Key area changes

However, it looks likely that in some key areas – notably stamp duty – we will get changes.

What we do know is that the new prime minister seems keen to use stamp duty as an incentive-based tax, with suggestions that all those purchasing homes under £500,000 would not have to pay it, and those paying the top threshold will see that drop from 12 per cent to seven per cent.

When might that happen? Well, it is likely to be at the next Budget, but how early could that be? Pre-October 31?

We shall have to wait and see, but what we perhaps don’t want is a market stalled even further by those who might feel they should wait to buy or put their house on the market, because of the belief that stamp duty change is coming.

In that sense, we need action – or clarity around whether change is happening or not – sooner rather than later.

 

Cut additional rate

Of course, what would give a real boost to purchase activity would be a focus not just on residential property stamp duty, but also the additional three per cent tax paid by landlords.

It may be wishful thinking to believe there could be a change here, but while there is a greater degree of focus on stamp duty, we should perhaps be making the case for change and the boost to purchase activity this would provide.

Overall, as we have been for a number of years, we find ourselves as a country and a market in a place of uncertainty.

I wish I could say that certainty is likely to be with us shortly, but one suspects that the issues any new prime minister has to solve are much more long-term in nature.

And we as stakeholders and practitioners will continue to have to do the best we can with the circumstances and situation we currently have.

 

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