Writing in LandlordToday, Louisa Sedgwick, Managing Director of Mortgages at Paragon Bank, reports that speculation is mounting over potential changes to Stamp Duty ahead of the upcoming Autumn Budget, with reports suggesting the Treasury is considering a new tax on the sale of homes over £500,000. This proposal is part of a broader discussion on overhauling property taxes to provide a more stable and predictable revenue source.

The mere suggestion of such a policy change is already impacting the market. Property owners, particularly those with high-value homes, may rush to sell to avoid a potential new tax, creating a market distortion. This is not the first time government “tinkering” has caused this effect; the article notes that previous Stamp Duty changes, like the 2016 surcharge on second homes, led to a 66% drop in buy-to-let purchases in Greater London, with investors favouring lower-priced properties in the North.

The buy-to-let sector, which is vital for providing rental housing, is particularly vulnerable to these policy shifts. The article warns that if the new tax applies to buy-to-let properties, it could significantly impact investor strategy and returns. If they are excluded, it could create a complicated, bifurcated system.

Lenders and landlords are also affected by this uncertainty. The delay between policy changes and their real-world impact on mortgage data means lenders are “flying blind,” unable to accurately forecast demand or risk. This leads to spikes and troughs in activity that make it difficult for all parties to make informed decisions.

The article concludes that what the housing market truly needs is not short-term, reactive measures, but a clear, progressive, and predictable Stamp Duty policy. Such a framework would support long-term investment, allow lenders to price risk more accurately, and help create a more stable housing market for everyone.