By Carol Lewis
Chancellor Kwasi Kwateng announced radical changes to stamp duty payments this week, and experts have reacted by predicting yet more increased house prices.
Chancellor Kwasi Kwarteng’s decision to raise the stamp duty threshold from £125,000 to £250,000 in England and Northern Ireland was one of the most talked-about measures in the 2022 mini-Budget — and at Black Brick Property Solutions, we welcomed the relief it offered buyers while remaining clear-eyed about its limitations.
The changes are significant in scope. First-time buyers now benefit from an exemption threshold raised to £425,000 on properties worth up to £625,000, meaning two thirds of homes listed on Rightmove are now stamp duty-free for first-time purchasers. The Treasury estimates that the cut will enable 29,000 more people to move home each year, with 200,000 buyers annually no longer liable for the tax at all. Those purchasing in London and the more expensive parts of the southeast stand to benefit most, with the average first-time buyer in the capital saving around £9,000.
However, at Black Brick we were quick to highlight that tax relief alone cannot solve the structural challenges facing the UK housing market. Our Partner Caspar Harvard-Walls made this point directly:
“Tax breaks are welcome, but there is still the fundamental issue of there not being enough new homes being built every year.” — Caspar Harvard-Walls, Partner, Black Brick Property Solutions
This view was echoed by broader market commentary. Several analysts warned that stamp duty cuts risk stoking house price inflation rather than driving genuine growth, potentially forcing the Bank of England to raise interest rates higher than previously anticipated — with some forecasts pointing to a Bank Rate peak of 5.6 per cent and mortgage rates exceeding 6 per cent. As Knight Frank’s head of UK residential research noted, rising mortgage costs could quickly eclipse the benefit of any stamp duty saving.
Meanwhile, the continued weakness of sterling against the dollar is creating a parallel dynamic at the top of the market, with international buyers — particularly those transacting in dollars — finding prime London and country properties increasingly attractive despite stamp duty surcharges for non-UK residents and second home buyers remaining unchanged.
At Black Brick, our view remains consistent: meaningful, long-term improvement in housing market conditions requires a sustained increase in housing supply — not just adjustments to the tax framework.
Read more in the full article here.