Property Market October 2022: Residential SDLT Round-up
As the Conservative Party Conference has ended and Liz Truss fights on to live another day after a turbulent week, we review below what was perhaps the biggest announcement of her premiership so far relating to property.
Like most people in the country, the property sector was waiting with great anticipation of the mini-budget 2022, which saw Chancellor Kwasi Kwarteng announce an immediate change to the residential property SDLT rate threshold.
As of 23 September 2022:
- the rate of SDLT due on the first £250,000 of a purchase price is zero (the level was previously £125,000, meaning it has therefore doubled); and
- if all parties comprising the buyer are individuals and are first time buyers of a residential property, they can claim relief so that they will pay 0% on the first £425,000 of the purchase price, if the purchase price is no more than £625,000 (in which case the relief can not be claimed and the standard rates on the total purchase price must be paid).
The thresholds stated in the second bullet point have been increased from £300,000 and £590,000 respectively, meaning first time buyers have received their own exclusive benefits from the budget.
Anyone who has dealt with property over the past 2 years whether in their capacity as a buyer, seller, tenant or landlord, or as agent/lawyer of any, has witnessed the effects that a change in SDLT thresholds can have on the sector, with property prices sky-rocketing and all professionals being incredibly busy dealing with the heated up market.
Having only just caught up from the effects of the previous threshold changes, there was almost a fear that the change would increase property prices and put the market into overdrive again, just as the pressure was calming down. However, due probably to increasing interest rates and a financially testing calendar year, predictions are that house prices will continue to fall and so the government may need to plant a few more seeds in order to grow the economy to the height it wants to.