I’m writing this prior to the weekend before the Budget but, up until this point at least, it appears to be one of the most low-key build-ups to such an announcement that I can remember for a while.
No doubt the weekend’s business and money pages will have been full of expectations and, perhaps, some insider knowledge on the announcements that Philip Hammond will be making but if the speech is anything like now then I’m not anticipating many major announcements, let alone any rabbits from the hat.
However, whatever the year, whatever the Budget, you can guarantee the issue of stamp duty will figure large in the lead up, regardless of whether the then Chancellor goes on to cover it. Once again, stamp duty and its perceived failings has been at the forefront of many mortgage and housing market stakeholders, with the Yorkshire Building Society being the latest to call for a shift away from buyers paying the tax, rather than sellers.
Without wishing to step on the Yorkshire’s toes here, I can pretty much guarantee that such a fundamental re-interpretation of stamp duty is not on the cards, certainly not when it’s the decision of a Chancellor like Hammond, who doesn’t appear to be a man that likes to shake things up too much.
Indeed, when it comes to residential stamp duty, I suspect the most that can be hoped for, is perhaps another ‘holiday’ for first-time buyers and/or maybe some help for older homeowners wanting to downsize. This was trailed heavily in the lead up to the Housing White Paper but did not appear in the document – perhaps because it is a taxation change – so it might well be on the cards come Wednesday.
Of course, in buy-to-let circles, the focus on stamp duty (and calls for change) come around the extra charge for additional property purchase, brought in at the end of last March and which have had a significant and fundamental impact on the buy-to-let purchase market. Calls to review and change the policy have been made since George Osborne announced it would be introduced, and they are just as loud now one year on from implementation as they have ever been.
This was just the same before last year’s Autumn Statement of course and there was no mention of a u-turn there, so a rolling back three months on seems just as unlikely. Indeed, judging by the figures to come out at the end of last year about the boost to the Treasury this policy has seemingly made, it looks even more unlikely that Hammond will make a change to measures he did not bring in, and probably feels has no ownership of anyway. In essence, there is no political capital to be lost.
The one crumb of comfort on this issue however does of course lie in the Housing White Paper, and its own take on ‘tenure neutrality’ and whether the PRS is actually being viewed on an even footing with home ownership. Here, we appear to have some sort of government support for the sector albeit one which appears to seek institutional investment rather than via individual landlords. However, there may be a recognition that continually hitting landlords in the pocket, via stamp duty and the forthcoming changes to mortgage interest tax relief, could end up being self-defeating, especially if they want to boost PRS supply.
That doesn’t mean that we’ll see any changes – after all the tax changes have not yet been introduced. Maybe, as I’ve mentioned before, the status quo is the best we can hope for and we won’t see any further measures that impact negatively on landlords, their ability to keep working in this sector, and their ambition to keep adding to portfolios.
The problem is, that when a sector is so politically hot, you can’t help but think the powers that be won’t be able to help themselves in terms of tinkering again. I hope I’m wrong, but for your landlord clients and for the buy-to-let market, I suspect that change is going to be the norm for some time to come. Unfortunately, when it comes to stamp duty it looks like – to misquote Sam Cooke – a change ain’t gonna come.
Bob Young is chief executive officer of Fleet Mortgages
