Geoff Hall at CA member firm, Gordon Brown Law Firm LLP, says that the Government’s new Budget next month (March 11) could help stimulate the North East’s property market.
Geoff Hall, who is Head of Residential Conveyancing at Gordon Brown Law Firm LLP, which has one of the largest property teams in the region, believes there could be a side-effect in the Budget which could potentially stimulate the property market.
He added, however, that he can’t see how the Chancellor could afford such a bold move.
Geoff said: “It is a nice thought for many and would probably stimulate the market, however, I fail to see how the Exchequer could afford such a bold move given that in the year to April 5 2019, Stamp Duty revenue was down 7 percent on the previous period and was still an incredible £11.9 billion.”
He added: “The average UK house price in November 2019 was £235,298. A move of this nature would potentially remove all but the highest valued properties from paying Stamp Duty.
“The only way, in my opinion, that such a move would be viable, given that Stamp Duty is I understand roughly 2 percent of the Treasury’s revenue, would be if revenue was raised via other means which could go against manifesto promises made by the Government.”
Pressure has been building on the Government to act on its pledge to abolish Stamp Duty below £500,000, which would save UK homebuyers tens of thousands of pounds.
Geoff added: “In the run-up to Boris being elected Prime Minister, he spoke a lot about Stamp Duty cuts for UK residents, yet this seems to have gone quiet.”
In terms of the increase in Stamp Duty for overseas buyers that was mooted in the Conservative manifesto, Geoff said that it really depends upon the Chancellor’s motivation to tax foreign nationals.
“The pledged three per cent surcharge on non-resident buyers depends entirely upon the Chancellor’s motivation to tax foreign nationals. This could be a gamble in terms of the market as in some areas of the country foreign investment makes up a fairly large part of the market.
“Just over two years ago the value of the pound reduced making it more attractive for foreign nationals to invest in the UK property market. To tax these investors could reduce the amount of investment from them, and where investment is still being looked at, an investor may look to reduce their offer to purchase a property to offset the increased taxation; this would potentially cause downward pressure on house prices in some areas.
“That said this may be part of the motivation, as reduced prices could make the market more attractive and accessible to UK residents. This could result in additional revenue to the Exchequer from foreign nationals who do decide to buy, which could also give the Chancellor some opportunity to make concessions elsewhere.”