Sir Keir Starmer has announced that he is standing down as leader of the Labour Party, with a new Prime Minister expected to be in place by the autumn. For homeowners, landlords and prospective buyers, the immediate question is a practical one. What might a change at the top mean for the cost of owning and moving home?
At Drivers & Norris we have spent decades guiding clients through shifting markets and changing governments. Political headlines come and go, but the decisions you make about your home or your portfolio deserve calm, informed advice.
A possible shift in how property is taxed
Much of the early speculation centres on Andy Burnham, the strong favourite to lead the party by the autumn. He has made no secret of his preference for taxing property ownership rather than transactions, and has previously backed a land value tax set at 0.48 per cent a year on the value of the land a property occupies. Rather than paying a single large sum when you buy, as you do now with Stamp Duty, you would pay a smaller amount each year based on the land beneath your home.
Tom Bill, head of UK residential research at Knight Frank, suggests the idea is on Burnham’s radar even if it is unlikely to be his first priority. He notes that scrapping Stamp Duty makes sense given how the current charge can hold back social and economic mobility, but cautions that an annual charge feels very different to a one-off bill, especially in London and the south east where the sums involved would be a larger share of household income.
The case for and against
High profile agent Trevor Abrahmsohn, founder of Glentree Estates, believes that removing Stamp Duty could release a surge of transactions and free up capital across the wider economy. A market slowed by heavy upfront costs could spring back to life. The concern, as both commentators point out, is what happens next. A modest annual charge today could rise over time, and Tom Bill warns that yearly revaluations would turn house price growth into a tax liability.
For now, none of this is policy. A great deal can change between a leadership contest and a Budget.
What this means for you
The honest answer is that nothing has changed today. Stamp Duty remains exactly as it is, and any reform would take time to consult on and introduce. That said, political change is a good moment to take stock, particularly if you are a landlord, a second home owner, a developer or an overseas buyer.
If you are buying, selling, letting or simply weighing up your options, the team at Drivers & Norris is here to help. Get in touch and let us turn the headlines into a clear plan for you.
Source: Estate Agent Today
— Drivers & Norris