How Will Boris Johnson Impact the UK Property Market?

Britain’s housing market may be broken, but many experts believe the appointment of Boris Johnson as Prime Minister signals a change for the better. With barely 3 months to go until Brexit, Johnson has hinted at radical policy changes that would impact the property market for home buyers, tenants, commercial developers, and budding buy to let property owners.

Here are just a few of the areas Johnson is expected to influence:

Making More (Affordable) Homes Available

The new PM has said he’s committed to building more affordable homes that will:

• offset our nation’s critical housing shortage, and
• get more young people and families onto the property ladder

It remains to be seen whether that promise also includes improving the supply of affordable rentals available from council and housing associations. But Johnson has at least hinted at extending the government’s Right to Buy scheme, which currently gives tenants the right to buy their council homes for less than the market rate.

Unfortunately, plans are also underway to restrict the popular Help to Buy home-ownership program in 2 years – and end it completely in 2023. This is largely the result of liabilities that could pose a significant risk to the government should the property market crumple after Brexit.

Reforming Stamp Duty

Despite financial vehicles like bridge loans making it easier to take advantage of property auction deals, the Stamp Duty Land Tax continues to make buying a home in the UK unnecessarily expensive. So, the most impactful changes in the coming months are likely to include stamp duty reform.

Stamp duty changes under consideration include:

• switching stamp duty liability from buyer to seller,
• eliminating stamp duty altogether on homes worth £500,000 or less,
• reversing stamp duty rates on homes priced over £1.5 million – from 12% back down to 7%,
• dropping the 3% levy attached to the purchase of second properties

These changes could mobilize first-time buyers, pave the way for better buy to let rates, and rejuvenate the property market overall.

Many estate agents and mortgage brokers are optimistic, in fact, that Boris Johnson’s tax plans will encourage more people to move within the UK – setting off a chain reaction of property transactions that would benefit homeowners and buy to let landlords alike.

Easing the Tax Burden for Property Development Professionals

There’s been no suggestion as of yet that changes to stamp duty taxes will impact commercial property. But Johnson has spoken favourably about cutting the corporation tax rate. And that’s likely to benefit property development companies as a whole.

At the very least, the pending Brexit resolution can’t help but bring an end to uncertainty in the commercial property development market. And some industry experts believe Johnson as Prime Minister heralds the beginning of a new era in both real estate and the UK’s economy.

In the end, only time will tell what the election of Boris Johnson really means for the property market. It’s still very much a game of wait and see.