Labour to reverse Tory Stamp Duty ‘relief” for first time buyers

Labour revealed two major housing policies over the weekend including raising Stamp Duty for first time buyers and loosening planning rules to allow house building on green belt land.

The party confirmed that Chancellor Jeremy Hunt’s Autumn 2022 decision to temporarily raise the threshold at which first time buyers pay the duty will not be renewed should Labour gain power. It currently sits at £425,000 but will return to £300,000 in April 2025 and covers properties being bought to the value of £650,000 instead of £500,000.

During the same budget, Hunt also reduced the ‘nil-rate’ threshold from £125,000 to £250,000 for all buyers, a measure Labour has decided to keep.

Nevertheless this creates a clear policy difference between the two parties as the Tories recently promised to make the higher level threshold for first-time buyers permanent.

Yesterday’s announcement follows a poll by estate agency Jackson-Stops which found that between 18% and 23% of those quizzed said the upper limit should be made permanent, depending on their age and housing status.

Green belt

Keir Starmer and Rachel Reeves also said Labour would “hit the ground running” including three new-build initiatives – previously said to be New Towns – as well as a local-authority-led review of building on Green Belt land.

Starmer also told The Sunday Times yesterday that Labour intends to publish a draft national planning policy framework which would see house-building targets reimposed on local authorities. He and Reeves also said that they want Labour to become the “party of house builders” although detail was light during the interview on what this means.

The announcements reveal that Labour will be on a collision course with traditionally Conservative areas of the South after the pair said councils would be forced to reassess their policies towards green belt building.

One reason – and the main one – why the Tories have failed to build enough homes, falling short most years by at least 100,000 homes, is that their traditional voters live in the rural villages and town outskirts that will be near these big new-build developments, and their Tory MPs were the ones who, most often, vote down planning reform changes.

Controversial

Boris Johnson in particular found this out the hard way during his 2020 attempt to usher in radical reforms of the planning process within a controversial White Paper.

He said his plans would see Britain build better, greener and faster, but they had to be ditched after internal Tory criticism as well as fierce disapproval from powerful rural and planning lobbying groups such as CPRE and the Royal Town Planning Institute.