Research from Cornerstone Tax found that 44% of first-time buyers cannot afford to live in their desired location due to rising house prices, highlighting the need for Government support in the upcoming Autumn Budget.
With 18% of homes for sale previously being rental properties, affecting rental supply, and landlords raising rents to cover financial pressures, affordability remains a significant issue.
David Hannah, group chairman of Cornerstone Group, suggested that maintaining current Stamp Duty thresholds would help first-time buyers and prevent further escalation of the housing crisis.
Hannah said: “The decision from the Government to lower stamp duty bands shows a concerning deficit of joined-up thinking.
“Does this Chancellor and Prime Minister not understand that if they want 1.5 million new homes, they cannot drive landlords out of the market, incur additional charges for first-time buyers and freeze up working capital for developers – which can only be available if these homes are selling.
“These former two measures have further deterred market entrants and if I were a builder, I’d be freezing development until there’s a ready market.
“Looking at this combination of measures alongside the current structural issues plaguing the property market, it makes previous governments look like Nobel Prize laureates.
Hannah added: “The government’s proposed changes act as a reminder of the Development Land Tax, a measure from the 1970s levied on landowners who created value on unused land.
“At its height, developers were paying 80% on gains and it decimated construction in this country.
“The lesson learnt is straightforward. You can’t incentivise development and growth through penalisation and taxation.”
“Moreover, I expect stamp duty receipts to fall significantly, then to flatline in Q1 2025, potentially plunging the British property market into a desperate situation.
“In essence, reducing stamp duty thresholds means that it will ultimately be the consumers who foot the bill.”
