It’s that time of year again: the days are getting longer, the trees are blossoming, and the one-time-only Spring Budget is rapidly approaching – with homeowners and landlords alike steeling themselves for more punishment from the chancellor.
The good news is it looks unlikely there will be much to punish homeowners or lower house prices in this Budget. The bad news? Those punishing stamp duty rules will probably remain in place.
Here’s what the experts think:
An oldie but a goody. It comes up almost every time, but stamp duty is the gift that keeps on giving to the chancellor.
Jeremy Duncombe, director of Legal & General Mortgage Club, says reforming the tax “could play a significant role in solving our country’s housing crisis”.
“By using stamp duty incentives to free up additional housing supply, the government can help ensure that families have more access to the larger homes they need and that smaller properties are available for first-time buyers.”
“What he needs to do is turn stamp duty on its head or eradicate it altogether,” adds Russell Quirk, chief executive of online estate agent Emoov.
“It is an archaic tax introduced to help fund a war against France many moons ago. Now that the Anglo-French relations are back on good(ish) terms, the anti-homeowner tax only heightens the mountain faced by aspiring UK buyers when trying to get on the ladder.
“Pivoting Stamp Duty so that it is paid by the seller would assist those beleaguered first-time buyers, particularly those in the South East who currently pay nearly £6,000 just for ‘permission’ to jump onto the housing ladder in one of the UK’s most expensive areas.”
The Institute of Economic Affairs goes even further: “Council tax and stamp duty could be replaced with an annual property-based tax set at a fixed percentage of a property’s value, with a cap of one per cent.
“The cost of this would be mainly borne by the rich, those who move less often and those currently able to avoid stamp duty. It would also include substantial charges levied on foreign non-residents who own UK property.”
Will Hammond take heed? Analysts at Liberum think it could be possible: they suggest a potential rise in the threshold for first-time buyers – although it’s unlikely.
Quirk predicts those buying homes worth £1.5m or more will get a reprieve from punishing rates of stamp duty.
“The UK market has remained strong through testing times since the last Budget, but the high-end sector has taken a real kicking where buyer demand is concerned.
“While the government is making more in stamp duty tax on each sale, the sharp decline in transaction volumes above £1.5m have resulted in the government actually making less money and Mr Hammond should adjust his housing policies based on this post-Brexit evidence.”
It’s been a rough few years for landlords, who have been hit with a raft of new legislation designed to put off second home buyers, including higher rates of stamp duty and the scrapping of mortgage tax relief.
The latest indignity? The government’s decision to cut housing benefit for under-21s, which the Residential Landlords Association reckons will put landlords off renting to young people.
Vice chairman Chris Town suggests Hammond should ditch the plan: “We call on the government… to reverse its plans to cut housing benefit for the under 21s.”
Read more: It's time we saw some real planning reforms
Housebuilders have urged Hammond to loosen planning rules, but analysts at Liberum suggest any planning reform beyond what was outlined in last month’s housing white paper won’t happen this time – although they did suggest a “mention of allocation of expenditure” could be afoot.