With just weeks to go in the Conservative party’s contest to select a new Prime Minister, there are promises from leading contender Boris Johnson to abolish Stamp Duty on homes selling for less than £500,000 and to rein in increases that were put into effect in 2014, according to a report in Property Wire on the 8th of July.
We have previously reported such a move in a story we published back in August of 2018.
Prior to the end of 2014, the rate of Stamp Duty on properties valued at between £1 million and £2 million had been set at 5%, increasing to 7% for those selling for more than £2 million. Changes introduced by then Chancellor George Osborne raised the rate to 10% for houses fetching between £925,000 and £1.5 million to 12% for those more than £1.5 million.
It is argued that these changes had the direct effect of reducing average prices of homes in London in the £925,000 to £1.5 million bracket by some £101,410 (or 3.41%) and those costing more than £1.5 million by £738,633 (or 4.66%).
With Boris Johnson’s latest proposals to revert to rates prior to 2014, therefore, could not only boost demand by London property investors but also increase the prices of high-end homes there by £700,000 or more – raising average prices of this type of home from the present £16.8 million to £17.6 million.
Although changes to Stamp Duty rates are likely to appeal most to London’s investors, similar benefits are going to be felt in the high-end housing market across the country, where average selling prices for homes costing more than £1.5 million fell by 3.72% since December 2014 and by 4.15% in the case of those selling for more than £10 million.