The news that Theresa May is to increase stamp duty for overseas buyers of UK homes is damaging to the country’s property market.
Not only is it a plan that carries with it more than a hint of xenophobia, the idea that ‘foreigners’ can be blamed for Britain’s house prices and rising market is somewhat unfair.
Announced at the recent Conservative Party Conference in Birmingham, the Prime Minister spoke of adding anywhere between 1% and 3% to already existing stamp duty rates. The government’s belief is that by allowing overseas buyers to conduct their business normally, while they pay the same duty as British residents, these transactions are inflating house prices.
The Prime Minister’s announcement, muddled as it is, is one made as she looks to hold onto power as the various political problems faced by the UK increase in size and scope. Besieged by Brexit, an unruly Cabinet, a typically stubborn back bench and a media that sensed blood in the water long ago, the Prime Minister has made the classic move of blaming outsiders for a country’s economic travails.
Slapping more stamp duty on overseas buyers will allegedly mean more funding to curb the growing problem of rough sleeping and homelessness that has steadily and sadly climbed in recent years. It is a problem May’s government, and preceding ones in recent history, have had years to solve but as yet has shown zero desire to do so.
Overseas investment has provided a huge boost and platform for the UK’s property market. In the wake of Brexit (another government folly being exacerbated by further indecision and in-fighting), the UK’s economy has been held up by a flood of overseas investors putting money into Britain’s available commercial and residential properties.
It is growing, competitive and booming cities like Liverpool and Manchester that would suffer greatly if this government were to pull the rug from under the feet of overseas investors.
The North West has been the eager recipient of much of Britain’s overseas investment since the referendum. Since January 2018, enquiries from Chinese investors into Liverpool property has shot up by 160%. Similarly, in Manchester, that figure of interest has grown by 256%.
The two Northern Powerhouse cities have also experienced a huge increase in the number of foreign direct investments (FDI) heading their way. In 2017, the two cities were in receipt of 90 FDIs, a huge surge on previous years. Manchester alone received more of such projects than global cities such as Toronto and Barcelona.
Lest we forget, any impact on the UK’s housing market has been brought about by the fiscally irresponsible policies of former Chancellor George Osborne. This kind of cash grab on people trying to buy homes and investors is simply a little bit of history repeating.
Of course, there’s every chance this is simply conference season pillow talk. With Brexit looming, and the notion that Theresa May might not even make it that as Prime Minister, the idea of hiking stamp duty for overseas property buyers may just be kicked into the long grass as time goes by.
For those of you wondering how stamp duty would affect you when it comes to purchasing a property, then leading property investment company RW Invest have a stamp duty calculator that will do the hard work for you.