One of the measures which was announced was a surcharge of 2% on non-UK residents buying property in the country. This is a move mainly focused on London and the South East of the country. As you would expect, there is a range of opinions on how useful this measure will be.
Will this measure support local buyers?
Mary-Anne Bowring is the Group Managing Director at residential property consultancy Ringley, and she said; “The falling pound has made housing more affordable to overseas buyers, while domestic buyers have had to contend with stagnant wage growth and ultra-low interest rates pushing up prices and eating away at their ability to save. An increase in stamp duty for overseas buyers will simply put things back to where they were before the Brexit vote and level the playing field for domestic buyers.”
The Chief Executive of NAEA Propertymark, Mark Hayward, has also spoken out about the stamp duty surcharge, saying; “If introduced, this policy allows those in the UK to have a better chance at purchasing a home. However, overseas buyers tend to purchase properties in prime central London which are completely unaffordable to most homebuyers anyway. Therefore, this move will not help those that need it most.”
Short-term concerns exist over this measure
The Chancellor announced money raised from the new surcharge on stamp duty will be utilised to provide funding for 6,000 new homes for homeless people. The surcharge is due to come into effect from April 2021.
As the surcharge isn’t in place until next year, there are concerns this will lead to non-UK residents buying property in greater number this year. This may create the opposite effect of what the surcharge was introduced to achieve.
Letting industry businesses aren’t pleased
However, while there has been debate over the utility of this surcharge, there has been criticism for the Government over a lack of support for the letting industry.
The Residential Landlords Association (RLA) and the National Landlords Association (NLA) have released a joint statement, saying; “The Government is undermining its own efforts to boost homeownership through its attacks on the private rented sector. By choking-off supply and making renting more expensive it is tenants who are hardest hit. Ministers need to wake up to the reality of the damage their tax measures are doing to the private rented sector and support landlords to provide the new homes for private rent we desperately need.”
Whatever move you intend to make in the property or lettings market, we are here to help. We are pleased to say we have assisted South West London landlords and vendors. We can arrange a property valuation on your behalf, and we can take you from start to end of the sales or letting process. To receive expert guidance and advice from local specialists, contact Holmes Estate Agents today.