Young professionals in London will be hit the hardest if Rachel Reeves reduces the current tax relief of £425,000 to £300,000 for first time buyers.
Labour’s election campaign included a pledge to make home ownership more accessible for all. With promises that included building 1.5 million homes and ensuring 70% of homes were owner occupied, the future of housing was looking bright. However, London’s youngsters are spooked by the latest budget talk that they say would make home ownership harder than ever.
Under the current scheme introduced by the Conservative government, first time buyers pay no stamp duty tax for properties under £425,000. This is due to expire on 31st March 2025 and it is speculated that this week’s budget will see Reeves returning to the figure of £300,000 in attempt to raise £1.8 billion a year for the Treasury by 2029-30.
Tennis Coach Alex Meek, 28, lives in Tooting Bec.
Saving for the deposit is hard enough, especially if you’re single. Getting on the housing ladder in London is way harder than other areas of the UK. Most of my friends up north have their own homes, but down here, because of the price, you need a fair stash just for the deposit. This change would set me back even further.
A very London problem
The impact of the return to previous thresholds would be felt most intensely in London where the average property price sold in the last 12 months was £689,000, according to Zoopla. In some boroughs, first time buyers could be required to pay an additional £15,000 in stamp duty.
Foxtons Estate agent Charlie Jenkins from Wimbledon, raised his concerns.
“What we’re seeing, particularly in this area, is that everyone is in a rush to buy their first home before the new thresholds are introduced. Most of my clients are first time buyers and a lot of them are affording their homes by the skin of the neck. When things change, I’m expecting to see a big decline in sales because young people just won’t have the additional money that will be needed.”
City News asked Charlie about the wider implications of the proposed changes.
“Well, like I say, the demand for 1–2 bedroom flats here has gone crazy because of this speculation, and we can’t quite meet demands. But if the threshold is lowered to £300,000 next year, I think many people will just hold off buying smaller properties. They will just wait out, perhaps a few more years until they can afford something more substantial and avoid having to pay stamp duty twice.”
No place like home
Mana Legha, owner of Winkworth estate agency in Wimbledon, thought it was unfair because hard-working young people should be able to have their own place.
“The thing is, in other areas of the UK, many people will be unaffected by these changes because for £300,000 in rural Wales, you could buy a very nice place, without paying any stamp duty. In London though, you won’t get anything for that. It could be the final straw that drives youngsters out of the capital, as they start to set up their lives and families.”
The Department for Levelling up Housing and Communities declined to comment on these issues.
What to expect?
Looking ahead, the balance between fiscal responsibility and creating an environment where young people can flourish will become clearer when the budget is released on Wednesday. Without careful consideration, the dream of home ownership could remain just that-a dream.
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Young professionals in London will be hit the hardest if Rachel Reeves reduces the current tax relief of £425,000 to £300,000 for first time buyers.
Labour’s election campaign included a pledge to make home ownership more accessible for all. With promises that included building 1.5 million homes and ensuring 70% of homes were owner occupied, the future of housing was looking bright. However, London’s youngsters are spooked by the latest budget talk that they say would make home ownership harder than ever.
Under the current scheme introduced by the Conservative government, first time buyers pay no stamp duty tax for properties under £425,000. This is due to expire on 31st March 2025 and it is speculated that this week’s budget will see Reeves returning to the figure of £300,000 in attempt to raise £1.8 billion a year for the Treasury by 2029-30.
Tennis Coach Alex Meek, 28, lives in Tooting Bec.
Saving for the deposit is hard enough, especially if you’re single. Getting on the housing ladder in London is way harder than other areas of the UK. Most of my friends up north have their own homes, but down here, because of the price, you need a fair stash just for the deposit. This change would set me back even further.
A very London problem
The impact of the return to previous thresholds would be felt most intensely in London where the average property price sold in the last 12 months was £689,000, according to Zoopla. In some boroughs, first time buyers could be required to pay an additional £15,000 in stamp duty.
Foxtons Estate agent Charlie Jenkins from Wimbledon, raised his concerns.
“What we’re seeing, particularly in this area, is that everyone is in a rush to buy their first home before the new thresholds are introduced. Most of my clients are first time buyers and a lot of them are affording their homes by the skin of the neck. When things change, I’m expecting to see a big decline in sales because young people just won’t have the additional money that will be needed.”
City News asked Charlie about the wider implications of the proposed changes.
“Well, like I say, the demand for 1–2 bedroom flats here has gone crazy because of this speculation, and we can’t quite meet demands. But if the threshold is lowered to £300,000 next year, I think many people will just hold off buying smaller properties. They will just wait out, perhaps a few more years until they can afford something more substantial and avoid having to pay stamp duty twice.”
No place like home
Mana Legha, owner of Winkworth estate agency in Wimbledon, thought it was unfair because hard-working young people should be able to have their own place.
“The thing is, in other areas of the UK, many people will be unaffected by these changes because for £300,000 in rural Wales, you could buy a very nice place, without paying any stamp duty. In London though, you won’t get anything for that. It could be the final straw that drives youngsters out of the capital, as they start to set up their lives and families.”
The Department for Levelling up Housing and Communities declined to comment on these issues.
What to expect?
Looking ahead, the balance between fiscal responsibility and creating an environment where young people can flourish will become clearer when the budget is released on Wednesday. Without careful consideration, the dream of home ownership could remain just that-a dream.
