Television presenter and property expert Kirstie Allsopp has issued a stark warning to Members of Parliament, stating that Britons are 'in a panic' about potential property tax changes rumoured to be announced in Chancellor Rachel Reeves' upcoming Budget.
Call for Stamp Duty Abolition
Appearing before the House of Commons Treasury Committee, Allsopp, known for hosting Location, Location, Location, argued passionately for the abolition of stamp duty land tax. She detailed how the current system is having a profound and damaging impact on the UK housing market, particularly for those trying to get onto the property ladder.
'What I see is young people buying more expensive houses really than they can afford because they know they can't pay stamp duty twice,' Allsopp told the committee. She also highlighted a trend where homeowners are choosing to extend and alter their existing two and three-bedroom houses rather than moving, due to the high cost of the tax.
Allsopp expressed concern that this behaviour is actively damaging the stock of homes available for first-time buyers. When asked if speculation about changes was having an effect, she confirmed, 'Yes, that is absolutely what I'm seeing.'
Expert Backing and Economic Consequences
Professor Tim Leunig, a director at consultancy Public First, supported Allsopp's case. He pointed to the 'weird' phenomenon under Help to Buy where first-time buyers frequently purchased three-bedroom houses, a more expensive option, specifically to use their stamp duty relief on a property they wouldn't quickly outgrow.
The financial burden of the tax was further emphasised by Richard Donnell, executive director at Zoopla. He revealed that 40 per cent of first-time buyers using their platform would now pay stamp duty, a figure that rises to nearly 80 per cent in London.
'It's a tax that leans really heavily on London and the South East,' Donnell stated. He also warned of the wider economic consequences, noting that a slowdown in property transactions has a negative multiplier effect, reducing spending on white goods, DIY, and home improvements.
Radical Reforms on the Horizon
The session took place against a backdrop of intense speculation about the Budget, scheduled for 26 November. It has been widely reported that Chancellor Rachel Reeves has ordered Treasury officials to examine a radical overhaul of property taxes.
One of the potential reforms being considered is the replacement of the one-off stamp duty levy, paid upon purchasing a property, with a new annual property charge. Such a fundamental change is contributing to the current uncertainty and anxiety within the market, as described by Allsopp.
It is important to note that stamp duty currently applies in England and Northern Ireland, with separate property tax systems operating in Scotland and Wales.
