Where the City’s movers and shakers get things off their chest. Today, it’s Ben Thompson, deputy CEO at Mortgage Advice Bureau.
It’s time to make changes for last-time movers, who deserve fairer treatment on Stamp Duty Land Tax
I, along with many of my colleagues in the industry, am hopeful for some much-needed reforms to the housing sector in the autumn statement tomorrow. As a priority, I hope that a serious, properly considered, and importantly, permanent reform to Stamp Duty Land Tax (SDLT) will be announced, as it’s more than overdue. This would help a greater number of people buy and move to more suitable homes more freely, and the economy would benefit from the so-called ‘multiplier effect’. I’d also like to see SDLT waived for last-time movers.
If I’ve worked my entire life and paid tax throughout, it would grind my gears to have to fork out a significant sum of money just to downsize – and I’m sure I’m not the only one. Currently, someone downsizing as a last time buyer moving to a property worth £300,000 would have to fork out £2,500 in SDLT. Even though you’re only paying Stamp Duty on your property’s value after £250,000, it’s still a significant amount of money.
That’s why a serious conversation and reform to the way Stamp Duty is applied to downsizers is also needed. Similar policies have been touted in the past, but now is the time to really consider the issue that actively discourages downsizing.
On the assumption that strict, fair and sensible age-related criteria is applied to this, I can see reform being popular, successful, and of course the right thing to do.
A survey earlier this autumn from estate agents Savills showed that more than a third of downsizers and empty nesters say that suitable stock is holding them back from moving. This highlights why the government should also think about how to address the lack of desirable homes for last time buyers to move to. With the right joined-up strategy, this SDLT initiative would have the best chance of working as intended. Otherwise, it could have the unintended consequence of pushing last time buyers into competition with first time buyers and landlords.
Is Stamp Duty the golden ticket for landlords and homeowners to go green?
The UK’s housing stock has some of the leakiest homes in Europe regarding energy efficiency and heat retention. This is certainly an area that we need to address to meet net zero goals, and I hope we see support for this tomorrow.
A potential SDLT rebate may incentivise landlords and buyers to upgrade a property’s energy performance. Despite there no longer being an imminent target for landlords to retrofit, there should still be a focus from lenders and the government to incentivise green changes.
Rumoured changes could see homebuyers with a low EPC being given the opportunity to upgrade to a C or above and become eligible for a Stamp Duty rebate, helping cover the costs associated with retrofitting and encouraging buyers of these properties to purchase and upgrade them.
We may need to wait until March for some (or hopefully all) of this reform, but either way, change is definitely needed.
More help needed for first-time buyers
There’s no denying the fact that getting onto the housing ladder can be difficult. It’s why I fully support and believe there should be more in the way of lenders innovating and supporting first time and aspiring homeowners. Steps taken recently by Skipton Building Society and its Track Record mortgage, allowing borrowers with track records of rent payments to borrow more, is a positive step forward. However, more needs to be done to encourage the large group of prospective buyers who are in ‘wait and see’ mode. An extension of the Mortgage Guarantee scheme tomorrow should also be supported, perhaps with a new initiative to turn reluctant renters into happy first time buyers.
A recommendation: The Man in the Glass by Peter Dale Wimbrow Sr.
I read this in The Sunday Times a long time ago, and it was Michael Vaughan’s favourite. I thought what a great way to ensure I live my life in such a manner that, at the end of the line, I can still like myself! Maybe a bit deep, but I’d hate to feel the opposite way, and this poem most definitely works for me.
A quote to reflect on:
Peace cannot be kept by force; it can only be achieved by understanding.Albert Einstein
I was compiling some slides a while ago, and this is something I never knew Einstein said. Many good things happen every day all over the world, and that cannot be overlooked. However, I am deeply saddened by certain world events at the moment, and for me, this quote really struck me hard.