Positive news coming out of the Houses of Parliament today as Chancellor Rishi Sunak raises the threshold for paying Stamp Duty from £125,000 to £500,000 on property until March 2021.

Here what the experts have to say…

Tim Hyatt, Head of Residential at Knight Frank, commented: “Moving house has a clear multiplier effect for the wider economy, different sized businesses in all areas feel the knock-on benefit.”

“Today’s announcement to temporarily cut stamp duty will act as a shot in the arm for UK housing and further bolster a market which has come out of a state of suspension. However, in order for a fully functioning market to return, the availability of higher loan to value mortgages must also be improved to support first time buyers across the country.” 

Oliver Knight, Head of Residential Development Research at Knight Frank, commented: “Today’s announcement will provide a welcome boost to property transactions across the market and comes at a time when activity levels and interest have already started to recover following the two-month market shut down. Clearly, the Chancellor recognises the multiplier effect that moving house can have on the UK economy with more money spent on DIY projects and renovations. However, while a temporary holiday will bring forward housing market and economic activity, as well as helping to address affordability concerns surrounding the up-front cost of moving, a wider re-think of property taxes is still needed to reduce the distortive effect SDLT has on property markets and maximise any stimulus the government plans to provide to the UK economy.”

Stuart Law CEO of Assetz Capital stated “We welcome the changes outlined today by the Chancellor – there’s no doubt this will have a positive impact on the market and help to partly make up for the larger deposits now required by buyers. As the first link in the housing chain, first-time buyers are the foundation of the whole housing market so we support any changes that benefit this group.”

“The government could, and should, go further however, taking a pragmatic view that this change alone isn’t going to fully balance the negative impact of the virus on the housing market.”

“We’d also advocate all of the recent buy-to-let taxes being removed for the next five years, as buy-to-let investors could potentially step in where first-time buyers can’t and support the bottom of many housing chains and prevent them failing. This means the 3% extra stamp duty on buy-to-let purchases should be removed as well and the removing the mortgage interest tax also recently introduced.”

“At a time when we will now doubtless see greater rental demand from virus-delayed first-time buyers, more rental property will help keep rents down. This would give first-time buyers a chance to save more towards the new larger mortgage deposits required.”

“It’s in the government’s interest to attract buy-to-let investors to help replace demand from first-time buyers in order to protect the housing market as a whole and help keep rents down for the time being too.”

Jeremy Raj, Head of Residential Property at Irwin Mitchell stated “The Chancellor prefaced his announcement by explaining how key the residential property market and the housebuilding sector are in relation to the confidence and strength of the economy overall. There is no doubt that the recent uncertainties and practical difficulties created by lockdown have had a massively detrimental effect.”

“The changes announced to SDLT today went further than most within the industry had dared hope. With an immediate increase in the tax free band to £500,000 for a fixed period until 31 March 2021, there will be a real boost to the sector. There will also be widespread relief that the implementation has not been delayed until the autumn, which would potentially have stalled the market entirely.”

“It is important to note that while the effect on the London market will be minimal, the vast majority of conveyancing transactions throughout the country will see a significant and immediate bonus effect, that should encourage greater activity.”

“We can however expect a number of interesting discussions regarding how this windfall is to be shared between buyers and sellers. Clearly anybody that completed their transaction within the last month or two will be rightly upset to have missed out. It also remains to be seen whether the market reacts by adjusting prices overall, or leaves the windfall with buyers.”

“Overall however this is a hugely welcome announcement for housebuilders, the residential property industry, homeowners and potential homeowners.”

Finally Managing Director of Barrows and Forrester, James Forrester, commented: “A bold move by the chancellor today and one that will no doubt stoke the fires of homebuyer demand with such a large proportion of those transacting due to benefit.”

“This shot in the arm should ensure top-line demand and price growth remain immune to any unseasonal downward trends and implementing this initiative from the get-go avoids any short-term decline in transactions.”

“The only criticism is, perhaps, that the government has once again focussed on fuelling demand rather than addressing the more pressing issue of housing supply. While this will help boost house prices, it will do little to address the supply and demand imbalance and the problem of affordability that many are already facing.”

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Daniel Peacock.

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