Has any Brexit uncertainty been removed?
The Conservatives are now enjoying a significant majority, 80 seats to be precise, Prime Minister Boris Johnson is now expected to be able to deliver Brexit on January 31.
The uncertainty over when and how the UK will leave the EU has caused the housing market to stall since the referendum back in 2016. Many people put moving decisions on hold until the outlook became clearer, however once Brexit is delivered, they are expected to return to the market. Not all of the uncertainty has been eliminated with this result, the UK still needs to negotiate a trade deal with the EU by the end of the transition period which is due to expire on 31st December 2020.
What does the is mean for foreign buyers?
As outlined in the Conservative manifesto, the party laid out plans to introduce a 3% stamp duty surcharge for overseas buyers, although it is not clear when this will be introduced.
The current expectations that Brexit may be finally delivered, has caused sterling to increase by 2% against the US Dollar. This has reversed some of the falls which were seen in the aftermath of the referendum, which had effectively meant UK property was selling at a discount to those whose wealth was held in other currencies.
Stamp duty reforms
Boris Johnson previously pledged reforms to stamp duty, which included increasing the threshold at which it kicks in to £500,000 and reducing the top rate to 7% from the current level of 12%. Yet, there was not any mention of stamp duty reform within the Conservative’s election manifesto, with the exception of the plan to increase the tax for overseas buyers.
We will have to wait until the new Government delivers it’s first Budget in February to find out whether the party will proceed with these proposals.
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