BoJo’s proposed Stamp Duty reforms

by Property 118

13:24 PM, 13th August 2018
About a month ago

BoJo’s proposed Stamp Duty reforms

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BoJo’s proposed Stamp Duty reforms

In his weekly Monday Column for the Daily Telegraph, Boris Johnson, has told Theresa May slash the absurdly high Stamp Duty (SDLT) tax rates and abandon affordable housing targets.

Boris indicated he thought the housing market is the single biggest and most urgent crisis we face and would lead to an impending crisis of capitalism. The theory being if you don’t own any capital assets how can you be enthusiastic about capitalism.

Boris would like Stamp Duty cut to facilitate a more ‘mobile’ housing market that would encourage First Time Buyers.

Boris went on to say: “It is not just that things were so much easier 30 years ago when I left university and went looking for a flat. It was only 10 years ago, for heaven’s sake, that the proportion of owner occupiers among 25 to 34 year olds was still up at 64%.

“That figure has now plummeted to 39%. More than half the key generation shut out of the housing market.

“This is meant to be Britain, the great homeworking democracy, but we now have lower rates of owner occupation for the under 40s than France and Germany.

“That is a disgrace. It is of little surprise that young people may give up on capitalism if it excludes them from housing.”



Comments

Mark Alexander

16:55 PM, 13th August 2018
About a month ago

Alexandra Morris, managing director of online letting agent MakeUrMove, said:

“Boris Johnson is right to say that the housing market is in crisis. His announcement appears timed to coincide with the housing minister James Brokenshire announcing a plan to reduce homelessness which he disappointingly suggests is in part due to "instability in the private rental market". The truth is that we’re facing a huge problem of lack of supply and the dire homelessness situation we find ourselves in now is also symptomatic of the lack of a joined-up housing policy from successive governments.The Government’s current housing policies are just tinkering around the edges of the issue. We need to deal with the cause of the problem, not the symptoms.

“The lack of supply is driving up the percentage of income required for a deposit. This is only one impact. The lack of supply is also creating problems in the private rental sector with rental prices being pushed up.

“The danger of just tinkering with the symptoms of the housing crisis are also evident in the private rental sector, where successive Governments have introduced a wide-range of measures, including the phasing out of mortgage interest tax relief, the impending introduction of the tenant fees ban, as well as proposals to ban no fault evictions and introduce three year tenancies.

“Whilst we welcome regulation which further professionalises the private rental sector - and we would welcome initiatives such as increasing empty property taxes and incentives to encourage landlords to offer longer tenancies or maintain rent levels for longer - by implementing piecemeal changes with little regard for the ultimate impact, the Government is simply compounding the problem.

“What is needed here is a comprehensive strategy to increase supply across the housing market, from properties for those looking to buy, to a greater availability of properties in the rental market. If the Government could get to grips with this fundamental issue, then the problems of lack of security for tenants and an inability to save for a deposit would all be dealt with as a consequence. It’s time the Government stopped implementing sticking plasters and pursued a wholesale transformation of the housing market.”

Please remember to sign and share our related petition https://you.38degrees.org.uk/petitions/competition-will-increase-the-quality-of-housing-of-all-tenures

Lisa S

16:59 PM, 13th August 2018
About a month ago

The problem with Boris Johnson, is that he will say what he thinks people want to hear, and when it doesn’t work, he runs away.

Rod

9:25 AM, 14th August 2018
About a month ago

How many times have I heard "affordable housing" I would say there are areas in most towns where 'affordable houses are available e.g. Merseyside at just £40k, it's a start!

Luke P

9:33 AM, 14th August 2018
About a month ago

Reply to the comment left by Rod at 14/08/2018 - 09:25
Apparently it doesn't count if it's not in London.

Richard Adams

13:32 PM, 14th August 2018
About a month ago

Rod is dead right. Not just Merseyside like he says. There are very cheap decent properties to buy in quite a few places. I've got one I can't sell!

Whiteskifreak Surrey

14:09 PM, 14th August 2018
About a month ago

From the recent media publication and some comments I am extremely concerned that any PRS reform will be confined to Stam Duty only. Landlords who fall into 40/45% tax bracket will be left to cover for the Treasury shortages and eventually bankrupted. I still do not understand how an individual can pay 80 or 90% of tax in a supposedly civilised society? When purchasing a BTL property for a long term the Stamp Duty can be factored in for a number of years, the tax liability changes with circumstances. What I worry is that even this forum starta paying more attention to Stamp Duty than to a killing effect of S24. I guess the Government counts on that...

Mark Alexander

14:19 PM, 14th August 2018
About a month ago

Reply to the comment left by Whiteskifreak Surrey at 14/08/2018 - 14:09
Stamp Duty is one of many attacks on landlords.

There are several threads on here opposing S24 if that’s the only issue you want to campaign against.

There are also several threads of Selective Licensing, which is the straw that breaks the camels back for other landlords.

Likewise, we have threads discussing the attacks on the ability to serve S21 notices, long term tenancies, finance becoming harder to raise.

Take you pick from any of the above, all of which are screwing the PRS into the ground.

Whiteskifreak Surrey

14:28 PM, 14th August 2018
About a month ago

Reply to the comment left by Mark Alexander at 14/08/2018 - 14:19
Thanks Mark, I have been a (paying) member of this forum for quite a long time, reading (and sometime commenting) majority of articles and discussions - and just picking up on a trend, in terms what is being discussed recently. We are victims of all these regulations, it is getting worse and worse, but by all means S24 may be that last straw... Everyone is in a different situation. I guess even media are picking on Stamp Duty, as S24 is less visible... Not a good time to be a Landlord is this country.

David Dorset

14:29 PM, 14th August 2018
About a month ago

Rightly or wrongly i am waiting for the crisis to deepen so it will become much more in the public domain. At the moment it barely makes news.
I am not highly educated nor do I spend hours studying the PRS issue each day so my view may be simplistic or wrong. However my view is that society is producing the same amount if not more people who then leave school and go into their 20's needing somewhere to live. Sharing and rent a room has taken up some of the slack, and maybe Brexit will create a bit of a temporary pressure release but overall we are still producing the same quantity of people who need to be housed.
My understanding is that, due to the recent policies that the government have introduced, becoming a new landlord is no longer a viable proposition. In fact I understand that many existing 'casual' landlords (those in full time work and also running one or two properties) and some older long established landlords are selling up and leaving the sector. So with a massive reduction of new landlords coming into the sector and a reasonable percentage of existing landlords leaving the stock of available rented property will drastically decline each year. The government believes that all young people want their own home but i think that we have a culture in this country where buying is so expensive and restricted that many younger people choose not to buy and want to rent. This gives them flexibility and of course they can often rent a better property than they could otherwise afford to buy.
My view is that rent will rise significantly over the next few years and that the government will have no choice but to do a U turn on their ridiculous policies. However by then the damage will be done and will take years to correct.
So with the increased stamp duty, restriction on mortgage interest relief, Interest rate rises and general over legislation the tipping point must arrive in about a years time. Landlords are often painted as demons and a scar on society. But what will happen when they start to become extinct?

Mark Alexander

14:35 PM, 14th August 2018
About a month ago

Reply to the comment left by Whiteskifreak Surrey at 14/08/2018 - 14:28
We value your input and I agree with you.

Perversely, those landlords starting today are better placed than those of us already in the business because they are coming in knowing the rules and can structure accordingly. We have had S24 thrust upon us, making it incredibly expensive and sometimes impossible to transition.

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