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Summer Statement 2020: Property

Commentary on the Chancellor’s 08 July Summer Statement from Blick Rothenberg’s Property & Construction sector team.

Protect – Support – Retain

Today’s announcements were all about jobs, with nothing about how the UK is going to pay for the crisis that has overtaken the UK economy; we are promised news on that in the autumn. However, there are points that those operating in the property and construction industry should be aware of.

For Individuals – No SDLT on dwelling purchases up to £500,000 (ignoring the 3% top-up) until 31 March 2021

It is estimated that 90% of individuals buying new homes between now and 31 March 2021 will not pay any Stamp Duty Land Tax (SDLT) on the acquisition. The following provides a summary of the savings for some buyers.

Stamp Duty Was
Stamp Duty Is
Average downsizer 320,000 5,750 0 5,750
Average first-time buyer 220,000 0 0 0
Average house price (UK) 231,000 2,120 0 2,120
Average house price (London) 540,000 17,000 2,000 15,000


The 3% top-up for purchases of ‘additional’ dwellings (e.g., second homes and buy-to-lets) and for purchases of dwellings by companies is unaffected by this announcement. For these buyers, the first £500,000 of the price will attract tax at 3%. First-time buyer relief is suspended, but the Stamp Duty ‘holiday’ makes it redundant. As highlighted above the holiday gives a maximum £15,000 saving for each dwelling purchase where contracts are ‘substantially performed’ or completed before 1 April 2021. Where contracts have completed before today, no tax will be repaid. Purchasers of dwellings in Wales and Scotland will not benefit.

In some cases, residential property transactions will now be taxed less than non-residential (or mixed) property transactions.

Today’s announcement was leaked widely. It is headline-grabbing and will please many, particularly in the North.

Individuals buying homes will now need to decide whether to spend the saving on increasing their offer or renovations/furnishings. A nice problem to have.  Evidence from previous Stamp Duty holidays shows that it is unlikely to increase total sales volumes and will instead merely bring them forward, and the end of past holidays has always made the fall greater. We are therefore pleased to see that this holiday is for eight months, although fear that this will still be too short unless there really is a “V” shaped recovery. Some buyers may decide the probability of a fall in the market is still too great to enable them to commit to a move – even with the Stamp Duty savings on offer.

Estate Agents, who have really suffered since March, will be delighted. The combination of a Stamp Duty holiday and pressure on non-residents to complete before the two per cent surcharge kicks in next April will give those that were contemplating buying this year a real incentive to act. The Chancellor has put a mask on the face of the housing market and agents would be wise to put away any profits they make this year as the real story is what the face will look like when it is lifted. As highlighted above, Stamp Duty holidays always produce a big drop in sales when they end.

Housebuilders should also benefit from an increase in demand from buyers. However, many national housebuilders have highlighted that they have problems meeting the demand for new homes from buyers entitled to use the current ‘help to buy’ scheme who are ineligible for the new (2021-23) scheme, whose homes have to be completed by 31 December. We anticipate that productivity on building sites will come under increasing scrutiny over the rest of this year.

Experience shows us that sellers tend to benefit from Stamp Duty holidays, enjoying on average almost half of the saving.

For Employers – Job Retention Bonus, Kickstart Scheme, Traineeship and Apprenticeship incentives

Employers are being offered a series of incentives to bring back employees, take on new employees and train up young people and apprentices of all ages. The table below summaries the key details of each scheme.

Scheme 16-24 year olds (£) 25+
Job Retention Bonus 1,000 1,000 Payable Feb 2021, for all returners employed
Nov 20 – Jan 21 paid a min of £520 pm
Kick Start Scheme 6,500 (max) For new jobs (six-month work placements), min 25 hours pw paid, Govt funds NMW, employers NI and employers auto-enrolment contributions
Traineeships 1,000 For employers giving work experience to trainees with level three qualifications or lower
Apprenticeships 2,000 1,500 For apprentices hired between 1 Aug – 31 Jan 21
Payment is in addition to the £1,000 already paid for apprentices aged 16-18


For employers who are uncertain about how their businesses will come out of the recession, this funding gives a financial cushion to input into their cash-flow forecasts. For construction and development companies looking forward to participating in the £100bn promised spend on repairs to public buildings and new infrastructure, there is a real incentive to look at recruiting and training workers to replace the EU workers who, from 1 January, will have major issues getting permission to work in the UK.

Smaller residential developers are eligible to apply for loans from the Home Building fund, which now has a further £450m of funding.

For Homeowners and Landlords – Green Homes Grant

A £2bn fund will be established to fund grants to home owners, including landlords, to make their homes ‘green’. The Government will fund £2 for every £1 spent by homeowners of landlords up to a maximum of £5,000 per household, or £10,000 for lower earners. It is anticipated that 600,000 homes could be improved by the addition of loft and wall insulation, installation of new boilers and low energy lighting, reducing the carbon emissions, and the heating bills of the occupiers.

Residential landlords have been subject to the MEES legislation from April 2018, which bars them from letting a property that has an EPC certificate of F or G. It is likely that these limits will increase in the future. Very limited funds have been available for landlords to undertake works to improve the EPC rating of their property, so this is a good opportunity to fund the necessary works to improve rents and ensure that their property is ‘future proofed’. Landlords taking advantage of the exemption that allows them to let their property on the basis that the necessary improvement works will cost more than £3,500 should also consider investing in further improvements whilst this grant funding is available, as this exemption may fall away.

Extension of the Home Building Fund

Smaller residential developers are eligible to apply for loans from the Home Building fund, which now has a further £450m of funding. It is expected that a further 7,200 homes can be delivered as a result of this funding.

Designed to help small residential developers, we have had very positive feedback about this flexible loan scheme. Pricing depends on the project, but it is possible to fund speculative developments, as well as sites with outline planning, using this fund. It is interesting to note that a proportion of this fund has been reserved for developers using ‘Modern Methods of Construction’.

Would you like to know more?

If you would like to discuss any of the above guidance or have other queries about how you can make the right decisions for the future of your business and your income, please contact Sean Randall or your usual Blick Rothenberg contact.

You can also visit our Property & Construction Hub for our latest insights.

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