Recent fiscal changes and speculation around future taxation are creating a climate of uncertainty and stalling market momentum ahead of the Autumn Budget, according to a property finance expert.
Richard Lynn, Senior Relationship Director at Secure Trust Bank (STB) Real Estate Finance, believes the market is struggling to find direction amid rumours of further Stamp Duty Land Tax (SDLT) reform.
Current speculation ranges from a reversal of the SDLT threshold reduction to more radical proposals, such as replacing SDLT entirely with an annual property levy.
This would follow the rollback of temporary SDLT relief measures that expired on 31 March. From 1 April, the nil-rate threshold for standard residential purchases reverted from £250,000 to £125,000, meaning buyers now face SDLT charges much earlier in the transaction.
While this has already impacted buyer behaviour, the lack of clarity around future taxation is compounding market hesitation.
Richard said: "It's no secret that there was a rush of loan completions leading up to the latest Stamp Duty Land Tax band changes, but data on asset classes like London apartments suggests that the market has since stalled. While capital remains available for development exit facilities, some developers are holding back on new schemes due to unclear exit strategies and shifting buyer sentiment.
"The idea of an annual levy replacing Stamp Duty Land Tax is gaining traction, but there's little detail on how it would work in practice. Uncertainty is the real issue, as it disrupts planning and stalls transactions.
"We've seen how targeted interventions, like the enhanced Stamp Duty Land Tax on second homes, can have a significant effect. Making homes more affordable for local buyers is clearly positive, but there's a strong argument for tapering such changes to avoid unintended consequences."
Despite the broader market slowdown, Richard notes that mid-market housing continues to perform well, particularly for well-located properties that are marketed effectively. He suggests there is still appetite among buyers where value and quality align.
Ahead of the Autumn Budget, he predicts its success will hinge on how effectively it restores confidence, especially among first-time buyers and developers grappling with affordability pressures.
"Consumer confidence drives economies. In my view, it's one of the most significant leading indicators. The rhetoric around promoting growth must be backed by action. Otherwise, the downside risk is clear."
Responding to MPC member Catherine Mann's claim that Britons are afraid to spend, Richard said: "I don't agree. They're not afraid - they just need certainty, which will inevitably morph into confidence. As the Autumn Budget approaches, the industry will be watching closely for signs of clarity and commitment to growth."
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