Fiscal Policy & Economic Backdrop
Autumn 2019

On November 6th Sajid Javid is set to deliver his first budget as Chancellor. Stamp duty, Help to Buy and changes to add stimulus to housing and construction are the current hot property topics.

HMRC report London’s residential SDLT receipts fell by 10.5%, the equivalent of £380 million in 2018/19 compared to the year previously. There were just 300 fewer property sales over £2 million, however the loss to the treasury equated to £105 million. While over one quarter (27%) of all transactions across the capital were subject to the Higher Rate for Additional Dwellings tax, there has been a reduction in cash buyer activity. To date in 2019 just 19% of sales have been cash purchases, compared to 27% at the height of the market (Land Registry).

The UK economy is expected to avoid recession in the third quarter,the economy posting better than expected growth of 0.3% in the three months to the end of August, according to the latest figures by the ONS, although uncertainty around Brexit continues to affect business investment and consumer confidence. The Bank of England has maintained the interest base rate at 0.75% but has warned rates may go ‘either way’ in the event of a no-deal Brexit. 96% of all mortgages issued during the summer were fixed-rate according to the LMS/CEBR, with close to half (48%) being five-year fixed rate mortgages, up significantly on two years ago.