The Conveyancing Association has backed the Society of Licensed Conveyancers’ calls for the Chancellor to use the Autumn Statement to reverse George Osborne’s stamp duty increases for additional properties and the changes to mortgage interest tax relief due to be introduced from April next year.
Eddie Goldsmith, chairman of the Conveyancing Association, said: “I think many would agree that we’ve seen rather more than a traditional, seasonal housing market drop-off over the summer – the latest figures from the Bank of England show that mortgage approvals continued to fall with their value down to £17.7bn in August from £19.2bn in June. The impact of the 3% increase in stamp duty charges for additional properties has been sizeable and we’ve seen considerable falls in buy-to-let purchase activity although remortgaging has improved.
“The anticipated boost George Osborne’s measures were supposed to give to first-time buyers appears not to have materialised. The latest figures from the CML show that landlord borrowing was 21% down year-on-year in July, while first-time buyers’ borrowing was down 19% month-on-month, and 4% year-on-year – hardly the renaissance in first-time buyer activity we were led to believe would result from buy-to-let activity being forced downwards.
“When you add in the uncertainty wrought by the result of the EU referendum, the impact across the entire housing market is sizeable. Transaction levels have dropped over the past few months, the market is subdued to say the least and this clearly impacts on the conveyancing sector.
“While we’re anticipating that the market will improve slightly throughout the Autumn, the industry would undoubtedly benefit from a reappraisal of those measures by the new Chancellor in his first Autumn Statement. It may be too much to hope that the 3% extra charge on additional property stamp duty will be abolished, but such a move – as well as a U-turn on next year’s mortgage interest tax relief changes – would be most welcome, sending a clear message that the private rental sector (and those active within it) are not the enemy, whilst breathing much-needed new life into the UK housing market.
“This represents a pivotal moment for the UK housing market because the anti-landlord and investor policies that have been introduced, plus the result of the EU referendum, has led to something of a perfect storm which (if allowed to continue) could reduce transaction levels to rubble for many months to come. Theresa May’s ‘new’ Government and Philip Hammond therefore have an opportunity to make a significant intervention that would benefit all stakeholders.
“We would urge them to take the appropriate action required to support a market which is absolutely pivotal to the health of UK plc.”