What the budget could mean to premium estate agents and their businesses.

A possible annual levy on homes over £2 million has been the most persistent rumour. The suggested model is a yearly charge of around 1 percent on the portion of a home’s value above £2 million. Though only a small proportion of homes would be affected, the impact would fall heavily on London and the South East.

Aside from the fact I can’t see how you would value so many homes so accurately, and then process appeals etc., this proposed measure could negatively affect house prices in that sector (or, probably more realistically, just suppress price growth) over the medium term.

Impact: Counter intuitively, potentially good news as it encourages sellers to move, especially empty nesters in large homes, although prices are likely to fall above that cliff edge price, whatever it would end up being.

Its hard to find an advocate of SDLT, and certainly as an industry we’d be happy to see the back of it, so likely a net positive if she can pull it off.

Reports have suggested the Treasury is examining either a restructuring of bands or replacing parts of stamp duty with a new ongoing property based tax (more on that later). Industry commentators argue SDLT fees of £100k and more for premium homes distort the market.

As sensible as it might be, I can’t see how Rachel would raise any significant sums in the short term without upsetting those who have recently bought (and therefore paid SDLT), now having to pay again with whatever would replace it. So if its phased in, probably sensibly, then great – but it doesn’t help the country’s finances short term, if the rumours are to be taken at face value.

Good, potentially great, news, if SDLT is abolished in favour of (pretty much) anything else.

April 1991 was the last time these values were set, and with 34 or so years of change its no wonder there are huge imbalances where high value homes, and those worth a fraction of their price, paying the same council tax.

It is expected that Reeves will address this, but I don’t envy her the task of how! For premium agents, new ‘super-high’ bands have been rumoured on top of G&H.

Although unpopular with homeowners, and may affect prices somewhat, a move in this direction encourages owners to sell, and therefore increased ‘churn’ of properties is great news for premium agents.

Potentially good news?

This has been, sensibly, all but ruled out by Reeves.

However, the bad news is of a rumour circulating of the removal of CGT for properties over a certain threshold, reported as £1.5m.

In the short term (assuming its introduced with a future hard stop date like 1^st April), this would make for a flurry of activity as owners race to beat the deadline, afterwards however, its another disincentive for homeowners to sell and therefore crystalise that CGT bill.

All in all, bad news, but unlikely anyway.

An effort to stem the bleeding of wealthy individuals leaving the UK’s punitive tax system, this could (as above, if there is a deadline), make for some great short term activity, but long term it again disincentives mobility, and therefore resulting in fewer sales.

Plus, this will unnerve foreign investors from considering the UK, so weakening both supply and demand.

Again, bad news.

These are (I think) the top of the rumour mill leaderboard - so for the impact these policies might have on premium agents, the scores on the doors are:

And

Better than I thought it might be, but disclaimer: this is MY interpretation of it, I might be wrong, and of course, all this is speculation at this stage.

Either way, at long last the waiting is finally over, and by far and away the very best thing the government could do for our industry, and likely ALL industries, is to not repeat this year and last year’s 6 month endless press cycle of doom and gloom; economies are built on markets and markets are built on confidence. Next year, zip it!

Lets all keep our fingers crossed for some constructive policies next, good luck out there.