The UK housing market is bracing itself for another uncertain summer as potential property tax reforms under Andy Burnham's future government plans continue to weigh heavily on homeowners and those looking to buy. Audit, tax, and business advisory firm Blick Rothenberg has warned that the decline in property sales and mortgage approvals in May is a sign of things to come.
The housing market typically experiences a boost as the UK enters the summer months, but with 98,450 sales recorded in May – down from 101,030 in April – it seems this trend may not be followed. The Bank of England's report revealing mortgage approvals decreased to 56,200 in May, significantly below the six-month average of 63,300, further suggests a slowdown.
Heather Powell, partner at Blick Rothenberg, points out that individuals are holding back from entering or climbing the property ladder due to concerns over job security, mortgage costs, and the cost of living. She specifically cites Mr Burnham's reported plans to abolish Stamp Duty Land Tax (SDLT) and Council Tax, replacing them with an annual property tax, as a major contributor to "uncertainty for homeowners and those thinking of buying their first home."
This uncertainty is causing delays as individuals struggle to assess the implications for their families. While the overall UK housing market has slowed, London has experienced one of the most pronounced downturns – Martyn Gerrard Estate Agents in north London reporting a 33% fall in valuations last week alone.
Simon Gerrard, chairman of Martyn Gerrard Estate Agents, notes that while a recent heatwave may have impacted activity, "ongoing political uncertainty" is making it impossible to ignore. Demand across London has softened by around 20%. As for the reported proposals, spokespeople for Mr Burnham's campaign remain tight-lipped on specifics.