Stamp Duty Shake-Up: Former Apprentice Candidate & Mortgage Broker Raj Chohan Warns Buyers Could Be Locked Out of the Market

In light of the upcoming Stamp Duty changes on Tuesday 1st April, we spoke with 2024 Apprentice candidate Raj Chohan - an experienced mortgage broker and property entrepreneur who owns Golden Key Estates and Golden Key Financial.

With over 15 years in the industry, Raj has built a reputation for helping buyers and investors navigate the property market. She shares her insights on how these changes will impact first-time buyers and potentially keep more people trapped in the rental market.

What key changes are coming to stamp duty on April 1st, and who will be most affected?

“The majority of people who will be affected by the changes in stamp duty are first-time buyers, while home movers between £250k-925k price will also see a change. The difference could be around £2,500, but whilst this is a fair sum, there are so many other fees associated with purchases, and the Government always wants a piece of it.”

“They want to bring as much money into the public purse; at the same time, they say they are supposed to be supporting residential home purchases.”

Do you think these stamp duty changes will have a long-term impact on the housing market, and could we see property prices shift as a result?

“I don't think the change will have a substantial impact, however, there are large concerns about how the government spends the funds. They don’t hold back on taxing those working hard to not depend on the state, and  I think the general concern is the lack of trust with governments.”

Do you think the end of the stamp duty holiday will result in more people staying in rented accommodation as they are priced out of ownership?

“By not being able to add Stamp Duty to a mortgage, the ending of the SDLT holiday will result in people needing to either wait to buy to save more or borrow from friends and family to cover the difference. Especially for first and second-time buyers, these costs are likely to delay their plans and could see them stay in rental accommodation for longer or stay with their parents until they save the rest.”

With interest rates remaining high, do you think this will keep more people in the rental market for longer than people and the government want?

“Many people have got used to historic low interest rates and mortgages at less than 2% but those days have gone, at least for the foreseeable future. It doesn’t look like inflation is coming down as quickly as the Government wants, so interest rates won’t fall as quickly either, making mortgages more expensive than they have been.”

“With inflation staying higher than expected, this is increasing the costs of goods and services, resulting in less money people can save for things like deposits and fees. Therefore, it may not be mortgage rates keeping people off the property ladder but the increasing cost of living.”

Do you think the rise in capital gains tax will discourage people from entering the property investment market?

“Absolutely. Those who can purchase another property as an investment are integral to the private rental market as they often look after the property themselves, know the tenants and provide great value to people in the rental sector. With an increase of Capital Gains Tax once they come to sell these investment properties, some will feel it’s not worth the time and effort if they get to keep less of the gains.”

If fewer potential landlords are buying second properties to let, could this put further pressure on the rental market?

“People owning an additional property to let provide great housing at often competitive prices versus investors with a large portfolio of corporate landlords. If this supply dries up, it’ll push more people towards landlords who are paying management fees and other costs to look after a much larger portfolio of properties, and this, in turn, can increase rental prices. Therefore, we could see rental prices increase if this supply begins to shrink.”

Is the new nil-rate threshold of £125k for stamp duty too low to support first time and second time buyers?

“In my opinion, the government should incentivise home ownership in any way it can. By having such a low nil-rate threshold, people will have to pay more in SDLT, which, while is good for the government coffers in the short term, could be bad in the long run. If people don’t own property, they may be reliant on state-provided lets, which cost the taxpayer to build, and they may not have an asset in retirement, which means they could be reliant on the state’s health and social care if they can’t afford anything else.”

Is the first-time buyer relief of £425k too low in high-cost areas like London?

“Data suggests the average first-time property in London is worth around £492,000, and the average house price in the Capital is around £650,000, so this relief rate is still too low to incentivise first-time buyers onto the ladder in London. The government needs to not only raise this relief rate but also improve infrastructure and encourage more building outside of expensive areas to help people buy outside and inside the Capital.”

Do you think the cumulative impact of stamp duty changes and capital gains tax increases will push more investors out of the property market? Could this potentially lead to more vacant commercial properties and overpriced private rented accommodation?

“In the commercial property market, high streets are empty and commercial premises like pubs are closing at a rate of knots. To encourage investment and development in this sector, the government should consider whether the increased tax revenues will be worth the additional government investment required to rejuvenate high streets and use vacant buildings in the long run.”

If you could, what policy changes would you advise the government to make to support economic growth on the local and national level?

“I’d encourage more crowdfunding type investment products to help retail and sophisticated investors redevelop vacant buildings and land. We have a lot of unused properties in the UK, and the government has already talked about developing the grey belt, but it needs to happen much faster than it currently is. Incentivising builders and developers, especially the small and medium-sized firms that can be more nimble than the large firms, could be a huge asset to the government and its housebuilding targets if they are incentivised correctly.”

About Raj Chohan

Raj Chohan is a property entrepreneur and the owner of Golden Key Estates and Golden Key Financial. As a candidate on The Apprentice 2024, Raj showcased her expertise as an entrepreneur to a wider audience. With a keen eye for business and strategy, she has effectively leveraged her growing social media presence and media coverage to establish herself as a trusted property expert. Raj continues to build her personal brand while expanding her business ventures, making her a prominent figure in the property sector.