Fiscal Policy & Economic Backdrop
Summer 2019

Boris Johnson has been named the UK’s new Prime Minister. Mr Johnson is set to quit the EU without a deal in October and has indicated an emergency ‘no deal’ Budget would include tax cuts and an overhaul of stamp duty. Mr Johnson’s mooted SDLT overhaul could involve switching the liability for SDLT from the buyer to the vendor, curbing SDLT for all properties up to £500,000 and a reversal of the 2014 hike from 7% to 12% on homes above £1.5 million. In the past year, two thirds of properties sold in excess of £1.5m have been in London.

From April 2020 changes to Capital Gains Tax regulations mean sellers will be required to pay gains within 30 days of property completion. Sellers may well need to get additional funds in place or look to offload surplus or underperforming properties before the change is introduced.

At 3.6%, wage growth in May was at its highest rate since 2008 and continues to outstrip inflation (CPI) which stood at 2.0% in May, down from 2.1% in April. The ONS also reports the UK economy rebounded by 0.3% in May, after contracting 0.4% in April, boosted by some recovery in car production. However, fears of a slowdown persist with growth in the service sector remaining static and the IHS manufacturing index at its lowest level in June since February 2013. Consumer confidence also fell back in June, following a brief uptick in May, according to the GfK, as consumers continue to remain concerned about the wider economy.