The chief of an online auction service says the Conservatives’ controversial proposal for a three per cent stamp duty surcharge on non-resident foreign buyers of British properties could have a silver lining for domestic purchasers.
Milton Rodosthenous - director of LetsBid Property, which has partnered with over 150 estate agents since it began operating - admits the Tory plan, revealed at the end of last week, will receive a mixed response for the industry.
However, he adds: “Additional stamp duty for overseas investors will represent a positive change for domestic buyers as there may be less competition for homes and price growth for certain types of properties could plateau.”
But he admits that it is a surprise the surcharge is proposed at three per cent - three times the level the Conservative government spoke about earlier this year - and Rodosthenous accepts there may be a hit felt by sellers of high-end properties in London in particular.
“Any market problems caused by additional stamp duty for overseas buyers could be alleviated by wider stamp duty reform, details of which are currently lacking in depth” he goes on to say.
Rodosthenous says that if the Conservatives win the December 12 poll with a working majority, and goes on to rapidly take the UK out of the EU, it could re-energise the property market.
“A continued focus on reforming the homebuying and selling process with policies such as Reservation Agreements and regulating property agents could also help to speed up transactions and build long-term confidence in the market” he believes.
There has been criticism of the proposed three per cent surcharge by many players in the industry.
“Overseas buyers have essentially supported capital-intensive developments here getting under way. Arguably some developments could be stalled without the pump-priming overseas investors provide to meet the pre-sales demands of many funders” according to John Tutte, chairman of Redrow.
Charlie Smith, of London Real Estate Advisors - who works with UK and international clients on the sale and acquisition of high-end property - suggests the move sends out the wrong signal when Britain needs to be pro-overseas investment after Brexit.
And Camilla Dell of buying agency Black Brick says it could deter mid-range buy to let investors from overseas who typically purchase new-builds; the knock on effect could be to slow development, she fears.