This morning Estate Agent Today broke the newsthat one of the big announcements at this week’s Conservative Party Conference is the proposed introduction of higher stamp duty of 1-3% for overseas buyers.
Whilst for many UK want to be homeowners this comes as a massive break for them. Adding this surcharge will take certain overseas buyers out of the market therefore supposedly allowing more UK buyers to jump into the space those investors used to fill.
However, surely this would only be possible if those UK buyers were able to afford the properties at the price overseas investors would be willing to pay… or in another scenario, perhaps those who like the idea, are hopeful that this will provoke a market crash so that they can get on the housing ladder?
It’s an interesting thought, people being excited about a pending crash. Without the thought that actually this could be coupled with an economic crash and tougher lending criteria whilst banks rally to get their money back (So chances are they wouldn’t be able to buy anyway).
I struggle to think of what needs to happen for properties to become more affordable for those desperate to get on the market.
Ideally the gap between wages and house prices needs to close. Borrowing needs to stay affordable. Savings accounts need to have higher interest rates. And the market needs to stabilise to give people a chance to save and then buy using the deposit they were saving for.
However, none of that includes excluding overseas buyers. But, I do get that taxing overseas buyers is an easy way of raising some cash. Not ideal if the developers in London don’t have anyone to sell to though…
Perhaps we are on the path to being handed one property per person at a price that’s appropriate for your wage and as your wages increase so can your property size.
I hope that’s not the case. Taxes are certainly getting higher though and it’s making a lot of landlords and investors nervous about what to do next.
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Natasha
