Former foreign secretary Boris Johnson has said that “absurdly high” stamp duty rates are restricting the country’s property sector, while builders banking land is pushing house prices up.
Despite recent figures showing the the number of first-time buyers has shot up since last year’s stamp duty changes, which took effect after the Autumn Budget, Boris Johnson has claimed the tax should be scrapped to get more people onto the housing ladder.
In comments in his Telegraph column, the politician attacked the country’s current homeownership levels, which have been depleting for the past couple of decades in favour of rented accommodation, particularly among 25-34-year-olds.
“It is not just that things were so much easier 30 years ago, when I left university and went looking for a flat,” said Johnson.
“It was only TEN years ago, for heaven’s sake, that the proportion of owner-occupiers among 25-34-year-olds was still up at 64%. That figure has now plummeted to 39% – more than half the key generation shut out of the housing market.”
“This is meant to be Britain, the great homeowning democracy, but we now have lower rates of owner-occupation, for the under-40s, than France and Germany.”
Johnson believes stamp duty is to blame for “freezing whole chains of purchases”, with even existing homeowners who want to downsize being put off trading in their properties for smaller ones because of the high cost of stamp duty that must be paid.
Build more homes
Current rates in England mean that stamp duty is paid on any home costing more than £125,000 – with the exception of the new rules for first-time buyers – and with average property prices in the UK now at £230,280 according to Halifax, this means most buyers pay the tax.
Last week, controversial rumours surfaced that the government might even consider increasing stamp duty rates further for second homeowners and landlords as a way of curbing house price rises, which was met by strong opposition from many across the industry – although the rumours appear unsubstantiated.
Meanwhile, another housing issue that came under fire from Johnson was affordable housing quotas, as he believes they actually prevent new homes from being built as builders and developers are unable to reach the minimum quota in some cases – keeping the country further from its 300,000 new homes a year target. He also accused property developers of landbanking and keeping housing costs high, adding: “They have the land, they plainly have the cash, and it is time they used both to build the homes the country needs – and not wall up cats while they are at it.”