Increase the stamp duty threshold to £500,000

While campaigning to be leader of the Conservative Party, Johnson announced he was considering increasing the threshold at which stamp duty kicks in to £500,000 from its current level of £125,000.

The move, when combined with the properties that are already not liable for stamp duty, would mean an estimated 770,000 homebuyers would not pay the tax each year, according to think tank Onward.

Winners: Anyone buying a home for between £125,000 and £499,999, with those purchasing at the top end of this range saving nearly £15,000 compared with the current system.

Losers: HM Revenue & Customs. The change could reduce the stamp duty take by around £3.3bn a year, according to Onward.

Reduce the top stamp duty rate to 7% from 12%

The Prime Minister also suggested he could reduce the top rate of stamp duty from 12% to 7%. The 12% rate, which kicks in on homes sold for more than £1.5m, was increased by the then-chancellor George Osborne in 2014. But it has been widely blamed for leading to a sharp fall in transactions at the top end of the market.

Winners: People buying a home costing more than £1.5m who will save considerable sums if the change goes ahead.

Losers: HMRC would see a further fall in revenues, although some of this drop could be offset if the change leads to more high-end homes changing hands.

Sellers pay stamp duty instead of buyers

Perhaps the most radical change Johnson is understood to be considering is changing who is liable for stamp duty so that the seller rather than the buyer pays the tax.

Such a move, which was not announced when he was on the campaign trail, would ease the burden on people trading up the property ladder, while those selling would be able to tap into their equity to pay the stamp duty they owed.

But the change could prove unpopular, as it would mean existing homeowners effectively having to pay the tax twice, having already paid it when they purchased their home.

Winners: First-time buyers purchasing a home for more than £300,000, people trading up the property ladder.

Losers: Those downsizing as they would face higher stamp duty bills on the home they are selling, rather than the one they are buying.

Anything else?

One aspect of stamp duty that Johnson has not been reported to be considering reforming is the 3% surcharge for buy-to-let investors and those purchasing a second home.

This additional tax has contributed, along with other tax and regulatory changes, to a fall in landlords entering the sector and those expanding their portfolios. It has, however, helped first-time buyers through reducing competition for homes at the bottom-end of the housing ladder.

It is also worth noting that there has not been an official announcement or timeline for the reforms published since Johnson became leader.

This uncertainty could lead to temporary distortions in the market if people delay purchases in the hope of paying less stamp duty if they wait.

Top 3 takeaways

• The Prime Minister has promised to increase the threshold at which stamp duty kicks in to £500,000 from its current level of £125,000

• Johnson is also expected to reduce the top rate of stamp duty from 12% to 7%.

• Under the reforms, the tax could be paid by the seller rather than the buyer.

The price of flats is falling as first-time buyers leapfrog their way on to the second rung of the property ladder.

The average cost of a flat fell by 1.6% in the year to the end of April to stand at £199,018, according to the Land Registry.

By contrast all other property types increased in value, with detached houses seeing the biggest year-on-year gain of 2.7%, followed by semi-detached homes at 2% and terraced properties at 1.9%.

Property commentators attribute the trend to first-time buyers delaying the purchase of their first home, then buying a more expensive property further up the ladder when they do take the plunge.

There is also the suggestion that while young people are quite happy to rent a flat, they do not necessarily want to buy one.

Why is this happening?

Some of the fall in the price of flats can be attributed to the current absence of buy-to-let investors in the market.

But this trend has been playing out over the past two years, following a raft of government tax hikes that made the sector less profitable, and it is unlikely to account for all of the fall.

Instead, it is thought that first-time buyers who traditionally compete with investment landlords for homes at the bottom of the property ladder are also shunning flats.

With the average age at which people purchase their first home increasing, many are instead thought to be jumping straight to properties that would be suitable for a young family.

Who does it affect?

Reducing the number of steps they take on the property ladder is a smart move for first-time buyers.

The typical move involving a house purchase costs £12,000, according to Lloyds Bank.

At the same time, while first-time buyers are exempt from stamp duty on the first £300,000 of a property purchase, this tax break does not apply to those trading up the ladder.

As a result, delaying the purchase of a home until they can afford an average priced semi-detached house costing £216,938, will save first-time buyers £1,838.76 in stamp duty.

What’s the background?

One of the reasons first-time buyers are able to leapfrog a rung of the housing ladder is likely to be due to the range of initiative’s available to help them purchase a home.

Under the Help to Buy equity loan scheme, people can purchase a new-build property with just a 5% deposit, with the Government topping this up with a five-year interest-free loan.

With the typical semi-detached home costing 9% more than a flat, this loan would be enough in many areas of the UK to enable first-time buyers to purchase something higher up the ladder.

The Shared Ownership scheme, under which people can buy a share in a property of between 25% to 75% and rent the rest, also enables young people to afford to buy larger properties.

Properties in the wider postcode area of a Waitrose store in the UK sell on average for £1,220,296 – almost £1m above the average of £227,001 spent on a home in the rest of the UK.

Homes within quarter-of-a-mile mile of a Waitrose store also sell for £469,933 on average, according to research into Land Registry house sale numbers from Property Solvers.

The eye-watering premiums underline how having Waitrose as your local supermarket is often a clear indication of living in an expensive area.

While this fact may not be a surprise, the marked difference in average prices is noteworthy.

But whether homeowners hit the property price jackpot if Waitrose gains permission for a new store in their neighbourhood, is less clear.

Those believing in the ‘Waitrose effect’ might argue that when the supermarket opens a new branch, homes in the local area see their worth jump.

Others will contest that it’s merely a reflection of the supermarket chain moving in on already expensive areas which they think will be ripe for customers.

The research took the average values of 24,874 property sales over the last two years within a quarter-of-a-mile of stores across the country.

Thirty-six stores were excluded because of no nearby residential property, such as Little Waitrose stores that adjoin petrol stations and those as part of large shopping centres where property is almost exclusively commercial.

There were also areas where no residential properties within a quarter-of-a-mile radius were sold in the last two years. This left a total of 315 stores.

The sale price data of homes near stores was then compared to the average sold property prices within the same postcode area.

The data also found that just 19.4% of properties close to a Waitrose store are under the UK national average, and this drops to only 3.2% of properties in the wider postcode area.

The cheapest properties located close to a Waitrose store were found in Wolverhampton (WV2), Preston (PR5), Sheffield (S11), Northumberland (NE46)
and Northwich (CW9).

The most expensive properties located close to a Waitrose store were found in Central London in Belgravia (SW1X), Marylebone (W1U), Knightsbridge (SW3), Kings Road (SW3) and Notting Hill Gate (W11).

The Prime Minister has pledged to ban property developers from building tiny homes with inadequate storage space.

Theresa May is calling for the introduction of mandatory design regulations which set out clear national standards for new-build homes.

She warned that the current lack of universal standards was encouraging a 'race to the bottom' among developers.

Speaking at the Chartered Institute of Housing’s conference, she said: “I cannot accept a system in which owners and tenants are forced to accept tiny homes with inadequate storage.

“Where developers feel the need to fill show homes with deceptively small furniture and where the lack of universal standards encourages a race to the bottom.”

Why is this happening?

A ‘nationally described space standard’, which sets out detailed guidance on the minimum size of new homes, was introduced in 2015.

But the standard is not mandatory and not all local authorities insist on it being adhered to as a condition of granting planning permission.

As a result, some developers have been reducing the size of both properties and individual rooms in order to squeeze in as many units as possible on to a plot of land.

May warned the situation had led to an uneven playing field with different rules in different parts of the country leaving buyers and tenants facing a 'postcode lottery'.

Who does it affect?

The move is good news for people who want to purchase a new-build home as it should ensure developers meet minimum standards on space and design.

People using the Government’s Help to Buy equity loan scheme will be particular beneficiaries as they are limited to purchasing a new build property under the terms of the scheme.

But the move could lead to higher property prices, as if developers find they are not able to build as many units on plots of land as they had previously anticipated, they are likely to pass on this cost to buyers.

Given the length of time between when planning permission is granted and when new homes become available, it could also be some time before any change in the rules benefit consumers.

What’s the background?

May also used the conference to confirm the Government was pressing ahead with plans to end no-fault evictions, under which landlords can evict tenants with just eight weeks’ notice, and it would be publishing a consultation paper on the issue shortly.

She also revealed that by this autumn a million new homes would have been created in less than five years.

She said the Government’s reforms, including its £5.5 billion housing infrastructure fund and giving local authorities greater freedom to use brownfield sites, had made it easier for homes to be built in the right places.

But while the increase in the number of new properties being built is good news, the figure is still below the estimated range of between 240,000 to 340,000 new homes that are needed every year just to keep pace with demand.

Top 3 takeaways

• The Prime Minister has pledged to ban property developers from building tiny homes with inadequate storage space

• Theresa May is calling for the introduction of mandatory design regulations which set out clear national standards for new-build homes

• She warned that the current lack of universal standards was encouraging a race to the bottom.