A change at the top can often bring a boom to the economy but with Brexit looming will Boris Johnson prove to be a boon to the UK housing market.
The impact on house prices once the UK has left the EU will hinge on how the economy responds. In the event of a ‘no deal’ Brexit, the Bank of England is likely to cut interest rates. Mr Johnson has already proposed a plan to raise the threshold for paying stamp duty from its current level of £125,000 to £500,000 at the same time as lowering the top rate from 12 per cent to 7per cent.
Estate agent and former chairman of the Royal Institution of Chartered Surveyors, Jeremy Leaf, says, “Boris’s positive outlook could boost market confidence at least in the short term.” However, the government’s spending watchdog, The Office for Budget Responsibility, warned last week that a no-deal Brexit would plunge Britain into a recession that would shrink the economy by 2 per cent and trigger house price falls of 10 per cent.
Johnson may also seek to switch stamp duty liability from the buyer to the seller. This means people climbing up the ladder would pay less tax, but downsizers would pay more. Since downsizers account for only 7 per cent of the stamp duty tax take, Johnson may be prepared to tolerate the wrath of this group. Even so, it could be disruptive to the market if larger, under-occupied homes are not freed up for families.
How will the North West of England be affected?
Since the EU referendum prices in Liverpool have risen 12.1 per cent according to Zoopla. Even in the event of a no-deal Brexit, it is expected property prices in the North will continue to rise, albeit more slowly and only if the economy continues to grow.
Sell now or wait for Brexit?
Many would-be sellers are playing a waiting game but they risk having to pay Stamp Duty if the tax system is overhauled, plus a no-deal Brexit could threaten the stability of the economy. With housing stock fairly limited currently, there is strong competition from buyers looking for homes, so now could prove to be a good time to sell but as with all things, only time will tell.