Germany’s top magazines show what they think of the new British PM. Image credit: The Times
The inevitable has happened: Britain has elected its very own Trump.
From failed journalist to MP, Mayor of London and Foreign Secretary; Boris Johnson has climbed his way to the UK’s highest political office.
Mr Johnson’s ascension to the top — like the man himself — has been deeply polarising, marked by gallows humour from all sides. But it is what it is, and the new PM has a rather challenging road ahead — the most pressing of his agenda being his promise to extricate Britain from the European bloc by 31 October, which he has committed to, “do or die”.
The first 100 days in office will be an indication of what Britain, the world, and, especially the EU can expect from the new PM, particularly with the UK’s proverbial exit falling within the same timeframe.
Uncertainty is expected to remain, if not double, where Brexit is concerned. After all, Mr Johnson has been strident in his views to leave the EU and is prepared to do it without a deal in place. Whether this stems from deep personal conviction or was merely a means to political advancement, is anyone’s guess.
Proposed Stamp Duty Tax Rate Cuts & UK Property Investment
One of Britain’s biggest crises, besides Brexit, is housing. The UK has been plagued by chronic housing undersupply, causing property prices to skyrocket especially in London and the southeast. Research by the House of Commons pointed out that an estimated 240,000 – 340,000 new houses needs to be built in England each year until 2031 to make up for the current backlog of 4 million homes.
The impending cabinet reshuffle will see the appointment of a new housing minister — its 18th in under 20 years (unless Kit Malthouse retains his portfolio) — and the people will expect housing to be a priority.
Mr Johnson’s full intentions for the housing market and the private rental sector remains to be seen, although he has pledged to cut stamp duty tax rates as the new Prime Minister.
Stamp duty rates for homes worth more than £1.5m were increased from 7% to 12% in 2014 under Chancellor George Osborne. Currently, only the first £125,000 of a property is exempted from stamp duty.
The new PM previously announced his intentions to abolish stamp duty on homes worth less than £500,000 and raise the threshold for stamp duty from £125,000 to £500,000, while lowering the top rate from 12% to 7%.
This is good news for local homebuyers in the future, but when and whether it becomes law is still a question mark. Should that happen, there will be less for the government’s coffers and there are suggestions that investors and foreign buyers should shoulder the shortfall.
A recently released report by MP Chris Philp entitled ‘Reforming Stamp Duty: New Ideas to Promote Home Ownership’ proposes a radical reduction in stamp duties — freeing thousands of Brits from punitive taxes — and pushing the burden of payment to foreign buyers instead.
Suggestions include a rise from the current 3% in stamp duty surcharge on second homes and investment properties to 5%, as well as an introduction of a new 3% stamp duty surcharge for non-UK buyers of residential properties. The report also proposes a new 1% tax on the value of homes left vacant for more than 6 months a year.
At this point, nothing has yet been set in stone, and changes will only be announced in the Autumn Budget which is not till October.
Investors would be wise to take advantage of the weak pound and consider the potential consequences arising from delaying investments in the hopes of paying lower stamp duties particularly while it is a buyers market — especially in London where there are currently opportunities to secure good deals. A substantial cut to stamp duty will see more buyers in the market, which will very likely push prices higher.
By Vivienne Pal
There’s no better time than now to invest in the UK. If you’re looking for investment opportunities in London, contact us at firstname.lastname@example.org, (+65) 3163 8343 (Singapore), 03-2162 2260 (Malaysia), or fill out the form below for more in UK Property Investment!