The Boris Bounce
Published 12 January 2020
Like him or not, the ‘Boris Bounce’ saw stock exchange values of property companies rise by 12% immediately after the election. FTSE 250 companies have seen 3.5% growth in their value - literally billions and billions of pounds worth of growth. The Bank of England has reported that they expect something in the region of £400 billion worth of investment money held by UK companies potentially to open the floodgates for a whole lot of investment into the British economy.
We can also expect public spending to increase next year; predictions are for a 5% increase in UK house prices, and at least a 5% increase in turnover. These figures may be conservative.
The postponed budget is due next month, and I have a message for the Chancellor: there are three main aspects constraining people’s ability to move to their next home that need your immediate attention.
1. The rate of stamp duty land tax (SDLT) has risen to such a level that it has put a lot of homeowners off moving. The average house price in Norfolk is currently £266,000, and the SDLT sum of £3,300 that you’d need to find to buy this property doesn’t sound too outrageous. However, if that person buys their next house at, say £400,000, they would need to find £10,000 in stamp duty, which is a lot from their £266,000 sale receipts. Stamp duty has to be more affordable for the average buyer.
2. Help To Buy has been a great success, but is only been available on new-build homes. So a staggering 80% of all first time buyers have bought brand-new, distorting the market; it has made it very difficult for first-time sellers to sell starter homes into the second-hand market. We have consequently not been able to develop chains of sales as people progress up the housing ladder. Help To Buy should be available for second-hand homes too.
3. Taxation rates for property investments are incredibly high. That means some investors are selling because their tax position has changed, reducing available rental properties and inflating rents. Please change this policy, as it is restricting the number of homes available for tenants to rent.
Let’s see if he listens … or if he truly is a politician!
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