The scare tactics adopted by the government to keep Britain in the EU ahead of last year’s Brexit referendum saw the now former chancellor George Osborne warn about the short-term impact of Brexit, insisting that property prices could drop significantly if voters opted to leave the EU on 23 June 2016.
He insisted that a UK exit from the European Union could cause house prices to nosedive by as much as 18% following a Brexit vote; an attractive proposition for many would-be homebuyers currently stuck in the rent trap because they cannot afford to buy property.
Based on the average price of a home in the UK at the time of the EU vote, Osborne’s forecast suggested that the average residential property could fall in value by more than £50,000 within two years of the vote in comparison with what it would be if the UK stayed in the EU.
But Osborne’s predictions were rather bold, given that there is a severe housing shortage in this country.
But there is another issue having a negative impact of some prospective purchaser’s attempts to a get a foot in the property ladder, at least across some parts of the capital, and that is stamp duty.
Stamp duty reforms announced by Osborne have contributed to the slowdown in the housing market and led to a sharp fall in property sales in London
“Stamp duty is stunting the mobility of a whole generation,” said Paul Smith, CEO of haart estate agents. “Until Government revises this regressive tax we cannot hope to solve the affordability crisis.”
The Office for National Statistics released its latest house price data yesterday revealing that the average price of a property in the UK is up 5.1%, or £11,000, year-on-year, which suggest that the foretold housing crash seems as unlikely as ever, which is bad news for some renters with aspirations to buy a home of their own, according to Paul Smith, CEO of haart estate agents.
He continued: “How can economists and industry commentators alike claim we are experiencing a Brexit induced downturn in the property market, when the average buyer is having to pay £11,000 more to buy a home than they did in the month of the vote to leave [the EU]?
“London experienced weaker house price growth again in July, but it would have done little to relieve aspiring buyers in the region, as the average house price continued to creep up to the half a million pound mark.
“Our latest branch data shows that the number of first-time buyers registering in London is down 27% on the year. Salaries simply cannot keep pace even with more subdued growth, and being stuck in a never ending rental trap is becoming the reality for increasing numbers.
“Stamp duty is stunting the mobility of a whole generation. Until government revises this regressive tax we cannot hope to solve the affordability crisis.”