Stamp Duty Holiday…
9 July 2020
Chancellor has just announced a temporary Stamp Duty holiday on the first
£500,000 of all property sales in England and Wales which will last until March
2021 (although, to be clear, the 3% surcharge on the acquisition of additional
homes will continue to be levied against the entire purchase price).
this should stimulate activity in what already has proven to be a volatile
market. Here in East Anglia we are seeing high levels of demand from
buyers seeking to escape to the country or coast and many properties have been
attracting offers from more than one buyer within days of marketing. At
the same time, it is noticeable that those buyers from out of area who are
hoping to sell in our larger towns and cities are not enjoying the same level
of demand; it would appear that we are seeing a ‘two-tier’ market.
Perhaps it is worth pointing out
at this point that this is the fourteenth alteration to the rates of Stamp Duty
to have been implemented since 1999 and more often
than not it is a double-edged sword; there is a risk that we may see a period
of stagnation if demand tails off following the expiry of this benefit in
Whilst we applaud
any stimulus to the property market, (as you would expect), perhaps the best
thing would be for the government to announce a scheme benefitting First Time
Buyers, such as opening up the current Help To Buy scheme –
currently restricted to purchasers of new-build properties – to the whole
would mean that the 90 per cent of buyers who currently do not choose
new-builds would have financial assistance, and the wider market would benefit
from the injection of funding that currently goes solely to housebuilders.
In addition, perhaps the government could also consider
underwriting or guaranteeing mortgages so that a lender is at no greater risk
for a 95 per cent LTV mortgage than for an 85 per cent one? This would
help because the key to market success is not gained through a stamp duty cut
or holiday, but by enabling more first time buyers.