I’ve spoken many times before of my desire to see government take property more seriously. For more than just lip service to be paid to what is, let’s face it, an essential part of the landscape of UK Plc.
Ideally, I’d like to see property taken out of politics. I now realise that maybe my wish has been just too great. For now, at least.
So now, as we approach the Budget in just over a fortnight, I have refocused my request. It’s a simple one: that on October 29, the Chancellor announces a complete and thorough review of Stamp Duty Land Tax.
The system as it stands, is simply not fit for purpose. It’s detracting investors on the one hand and preventing first-time buyers from actually buying, on the other. The sum of these parts is a slow down in the market, but this is not terminal and it can be reversed.
We need to get the UK’s property market moving and to do that, issues of affordability need to be addressed. Stamp Duty in its current form places too great an upfront cost to what is an already costly expense. This consequently puts people off.
I’m not here to suggest the perfect solution but I have considered what the options might be.
My first thought was that we need a flat rate of Stamp Duty. A rate of 1% across the board was the magic figure that initially sprung to mind – ‘level the playing field and reap the rewards’, I thought. Frustratingly, closer examination of the figures suggest that may not be the solution and any such flat rate may instead need to be closer to 3.7%, which certainly wouldn’t be well received.
Instead, perhaps a reconsideration of the boundaries at which stamp duty comes in to play should be made. Increasing each by £100,000, could have a positive effect across the board and stimulate movement in the market. A reduction of just 1% on the charges that impact on current boundaries, meanwhile, could have a lesser but nonetheless still posititive effect too.
Either of these moves would, in my view, stimulate greater transaction levels and in doing so, re-address the current imbalance of supply and demand. Of course, each individual Stamp Duty receipt would be smaller than at present, however, the increase in quantity would ensure the net result was maintained…if not, increased!
The fact, too, that a more buoyant property market would have a positive knock-on effect to the wider economy and stimulate a feel-good factor amongst the population, simply cannot be overlooked when considering the impact that such a review could have.
So as we approach Budget day, I’d urge the Chancellor to do the right thing for the UK’s property market. We are a nation of actual and would-be home owners and the easiest way to faciliate that is to remove (or at least lessen) the barriers which currently prevent it for many. Stamp Duty Land Tax is well overdue a comprehensive review – Chancellor, I urge you to do the right thing…
*David Westgate is group chief executive of Andrews Property Group