Stamp Duty surcharge wrong on three levels
Chancellor George Osborne announced the change which will come into effect from April next year in last week’s joint Autumn Statement and Spending Review.
Firstly Coady said the revenue raised from the initiative will be “nominal”, secondly he predicted a rush to buy before the change occurs and thirdly he forecasted higher rents for tenants.
He said: “The stamp duty will be ineffective in helping first-time buyers, indeed it could hinder them further. If the government is serious about helping generation rent it needs to rethink. The solution to the housing crisis is not the rate of stamp duty. Planning restrictions and building more homes would be a better way to deal with the ongoing housing crisis in Britain.”
He added: “The revenue raised by this initiative – £1bn by 2021 – is a nominal figure when given the scale and seriousness of the UK’s affordable housing crisis.
“To many it seems this is something of a political stunt. The government is wanting to be seen to be acting on this emotive and topical issue and is doing so by appealing to the politics of envy with buy-to-let landlords and second homeowner the targets.
“It may trigger something of a ‘rush-to-buy’ phenomenon between now and April by those wanting to purchase a buy-to-let property racing to avoid paying the extra levy. This will, of course, push up prices in the short-term.
“Furthermore, in the medium to longer term, I don’t believe it will put off overseas or UK purchasers from investing in property.
“Those who are renting could find their rents are even higher after this policy comes into effect in April, as landlords pass on their higher costs to tenants. This, therefore, would make it even harder for first-time buyers to get on the property ladder.”