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Industry attacks Conservatives over Stamp Duty foreigner tax pledge

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Mon 25 Nov 2019

Industry attacks Conservatives over Stamp Duty foreigner tax pledge

Builders and agents point out that foreign investment is key part of many prime markets in the UK and proposed 3% extra Stamp Duty would put many investors off.

Nigel Lewis

25th November 2019 0 692 Views

conservative manifesto

The Conservative party launched its manifesto yesterday which confirms the major housing policies that it has been leaking to the media over the past week.

But the manifesto was overshadowed by Boris Johnson, who had earlier announced that overseas residents buying UK property would pay an extra 3% Stamp Duty, a measure that is expected to raise an additional £120 million in tax revenue.

The extra tax is to be spent on ending rough sleeping within the next five years but has been attacked by several leading property companies including builder Redrow, estate agency JLL and a leading mortgage brokerage, Altura.

“Overseas buyers have essentially supported capital-intensive developments here getting under way — arguably some developments could be stalled without the pump-priming overseas investors provide to meet the pre-sales demands of many funders,” said John Tutte, chairman of Redrow.

The other measures confirmed in the manifesto include:

  • Government-backed long-term fixed rate mortgages to enable first time buyers to secure affordable home loans, people who otherwise might have struggled under the current lending restrictions brought in following the financial crisis of 2008/9.
  • Scrapping Section 21 ‘no fault’ evictions but ‘strengthening the rights of possession’ for good landlords.
  • Introducing lifetime ‘portable’ rental deposits.
  • Offering new-builds to verified ‘local people’ at a 30% discount, funded by developers via the planning process. This would appear to be an alternative to both the ‘affordable homes’ quotas included in planning and developer contributions to infrastructure projects via Section 106 payments.
  • Replacing Help to Buy with a similar method of support for first time buyers when the current scheme runs out in 2023.

Link to Lettings news“We agree that the system for repossessing properties needs to be reformed and support the Conservatives’ proposals to strength the possession rights of good landlords,” says David Smith of the Residential Landlords Association (left).

“It is vital that the reforms are got right. At present it can take over five months for a landlord to repossess a property through the courts in legitimate circumstances.”