Stamp Duty Reform calls from Rightmove

The property portal Rightmove, are the latest to join in a long line of growing calls for the Chancellor, Jeremy Hunt to introduce Stamp Duty reform in his Spring Budget, which is due next week.

Rightmove have identified key reforms that it feels need to be considered by Hunt. These include: -

Regional variations in the Stamp Duty levy.

A mortgage scheme and green incentives for landlords to encourage making their properties more environmentally friendly, which would ultimately improve the energy efficiency and quality of rental homes for tenants.

In the latest data released by Rightmove, Stamp Duty has a disproportionately unfair affect on the London region. This is because the same zero tax charge is payable for homes up to £250,000 for all movers and £425,000 for First-Time Buyers. As properties are significantly more expensive in the London area, the numbers that fall within this bracket are much lower. For example, In London, only 4% of residential properties that are on sale are exempt from the existing Stamp Duty charges for all buyers. This is compared to 71% in the North-East and 51% in the North-West.

In addition, less than a third (28%) of properties for sale in London are currently exempt from Stamp Duty for first-time buyers, compared with nine in ten homes (91%) in the North-East. This also includes 82% in the East Midlands and North-West regions.

It has therefore, been suggested by Rightmove that a fairer system would be to adopt a more localised approach to Stamp Duty charges. This would be in-line with regional property prices, thereby supporting far more First-Time buyers to enable them to get a foot on the ladder. This could also in theory, encourage more movement going up and down the property ladder.

Rightmove’s Property Expert, Tim Bannister commented: “Stamp Duty is a big barrier to moving, with some who would potentially consider a move likely put off by the hefty stamp duty tax in addition to other moving costs. At the very least the government should be thinking about making the current changes to first-time buyer stamp duty charges permanent, with the higher thresholds introduced in 2022 due to expire next year. However, we think there is an opportunity to go a step further.

“With such regional variations in property prices, increasing stamp duty thresholds in line with these regional variations would seem a logical first step for stamp duty reform. Whilst longer-term supply measures are also needed, this could be one way to help first-time buyers trying to get onto the ladder in more expensive parts of England.”

Rightmove have also suggested that any introduction of a new scheme to help First-Time buyers should go further than the anticipated 99% mortgage scheme is likely to.

Mortgage Expert Matt Smith from Rightmove, says: “Whilst we support new solutions to help more first-time buyers, the 99% LTV mortgage alone is only likely to support a relatively small group.”

Jeremy Hunt, has confirmed that he will deliver his 2024 Spring Budget in the House of Commons on 6th March.