Sunak set to announce Stamp Duty Holiday in bid to revive housing market
As part of a raft of measures aimed at getting the UK economy back on its feet, Chancellor of the Exchequer, Rishi Sunak, will reportedly reveal plans during his summer statement on Wednesday to increase the Stamp Duty threshold.
At present, the threshold is set at £125k, but this could rise to as much as £500k according to reports.
The new threshold is designed to make it more financially realistic for first-time-buyers to get onto the property ladder.
However, despite the Prime Minister repeatedly stating that he wishes to overhaul the "huge problem" of stamp duty, the new threshold is believed to only be temporary.
Mary-Anne Bowring, group managing director at Ringley and creator of automated lettings platform, PlanetRent, comments: “The Chancellor’s proposals to exempt most homebuyers from paying any stamp duty under plans to kick-start Britain’s economic recovery is welcome news.
“A stamp duty holiday would no doubt cause a rush of transactions and help breathe life into a housing market that has been put into deep freeze in an effort to battle coronavirus.
“The government should be looking at long-term solutions as well as short-term sticking plasters when it comes to fixing the UK housing market.
“Millions of Brits were already renting, and that number was predicted to grow anyway with or without coronavirus. The disruption caused by coronavirus will likely see rental demand grow, as banks squeeze potential buyers with tighter lending restrictions and people put off buying or selling a home as it becomes clearer COVID-19 has caused continued uncertainty and disruption in the medium term.
“Eliminating additional stamp duty for buy-to-let investors would help stimulate the supply of rental homes while also driving wider activity in the housing market. Landlords are a crucial source of development finance through off-plan sales and will help support getting Britain building again.”
Tom Bill, Head of UK Residential Research, commented: “A stamp duty holiday would provide welcome financial relief for millions of people, including first-time buyers. The government understands that moving house has far-reaching benefits for the UK economy and this may form part of a wider rethink of property taxation that recognises this strategically important role. However, it would need to be introduced immediately to prevent buyers from putting plans on hold and losing the momentum that has built since the market re-opened.”
Tomer Aboody, director of property lender MT Finance, says: "While plans for a stamp duty holiday are a step in the right direction, what has been suggested so far doesn’t go far enough. The threshold for higher-end properties - £1m-plus - is still at extraordinarily high levels, which prevent many from selling or buying. While giving a stamp duty holiday at entry-level, why not also reduce the higher-end stamp duty to previous levels where it was a set amount? This would allow, even for a short period, for the market to evolve, and for buyers to move up and down the ladder more easily. This, in turn, would stimulate the economy as people move, develop, refurbish, buy furniture - bringing in a lot of business across the board and boosting jobs.
"Many older buyers who would like to downsize would also benefit as they understandably do not want to spend a big chunk of retirement income on stamp duty when selling up and buying something smaller. Overall the Chancellor’s ambition and help throughout this difficult period has been extraordinary. The stamp duty problem is one which has been an issue for a few years now, and it is time to tackle it.
"The UK economy is built on housing - let’s get this moving, which will get the rest moving."
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