Stamp duty for first-time buyers is Burnham's most pragmatic move

Andy Burnham became prime minister on Monday, ending weeks of political transition and turning industry attention to what his government will do about stamp duty, council tax, and the cost of getting on the housing ladder.

The answer, for now, is unclear. His backing for a proportional property levy to replace both stamp duty and council tax – aligned with proposals from the cross-party Fairer Share campaign – remains broad in principle and thin on detail, leaving brokers to manage clients who are already pausing decisions in anticipation of reform.

Denni Tyson (pictured top), founder of DT Financial in Kent, told Mortgage Introducer the new prime minister should treat stamp duty abolition for first-time buyers as a straightforward political and economic choice, one that costs the Treasury relatively little while removing a material obstacle for people trying to get on the housing ladder.

"If he's on about stimulating the economy and doing this and doing that, that's the first thing you've got to look at for the housing market," Tyson said. "I think it's just a pragmatic choice to get rid of it."

Deposits are not the problem

Tyson is clear the deposit barrier, often cited as the primary obstacle for first-time buyers, has softened in recent years. Parental and grandparental gifting has become widespread, driven partly by financial planning strategies that encourage families to pass wealth down during their lifetimes rather than through inheritance.

"I don't really see there's a problem with deposits now," he said. "Mum and dad and grandparents are gifting their money. Let's face it, a lot of parents are."

That shift makes stamp duty the more pressing friction point. For buyers purchasing in south-east England, where even modest properties can exceed £300,000, the levy adds thousands of pounds to an already stretched completion bill. Tyson noted some new-build developers have begun absorbing stamp duty costs on behalf of buyers to move stock – a workaround that underlines how damaging the charge has become to transaction volumes.

"It's already a lot of money," he said. "The new-build companies are paying it for them because they want to get them in the houses."

Tyson doesn’t expect removal of the tax to push up prices. "I don't think it would change pricing at all. It will be the same, but I think it will just incentivise it a little bit."

What would a land value tax mean for south-east borrowers?

Beyond stamp duty, Tyson is broadly supportive of Burnham's longer-term ambition to replace council tax with a proportional property levy. The Chartered Institute of Taxation has summarised Burnham's property tax thinking, noting a consistent thread in his economic outlook that the UK overtaxes labour and undertaxes assets. Tyson acknowledged, however, that public understanding of the proposal remains limited and implementation would be far from straightforward.

"I don't think people are really aware of it," he said. "I think people are more just wondering what he's going to do."

The case for reform is, to Tyson's mind, most visible in the South East. He pointed to the disparity between what high-value London homeowners currently pay in council tax and what their properties are actually worth – a system widely criticised as structurally regressive.

"You've got people in London sat on £12 million houses in Chelsea that pay £120 a month tax," he said.

The valuation mechanism, Tyson argued, is the most technically complex element of any transition. He expects lenders' data to play a central role.

"The only thing you'll find is the valuation part, that's the bit that will be quite tricky," he said. "I think they'd use the bank's data, because the bank's data is more conservative."

If Burnham does push ahead, Tyson believes the change would be consequential. "I think if he does sort of move into that, I would say that's a big change that is long overdue in my opinion."

A market waiting for clarity

For brokers in Tyson's position, the uncertainty itself is the most immediate challenge. Clients in London and the South East are increasingly aware that major property tax reform may be coming, but without confirmed policy detail, decisions are being deferred. The purchase market is already showing signs of hesitation, with buyers pausing over whether Burnham will scrap stamp duty before committing to a transaction.

Brokers advising clients on affordability will also need to weigh the longer-term implications, with analysis of what a proportional property levy could mean for mortgage lending criteria already drawing attention across the intermediary sector. Others in the industry have argued reform of stamp duty could unlock a housing market that has stalled under the weight of transaction costs.

Tyson's message to the new government is grounded in practicality rather than ideology. The structural case for land value reform is sound, he argued, but first-time buyers need action now, not a medium-term policy conversation.

"I think it's long overdue," he said. "I think if Burnham’s got some common sense he will do it because that should be the first thing you look at."