The stamp duty holiday has been well trailed and there’s absolutely no doubting that it will provide many house purchasers with a potentially significant saving – for example, if you were not a first-time buyer and were purchasing a £250k home you would have paid £2.5k in stamp duty, now you pay nothing.
The big focus now will be on what incentive it provides and whether it acts as a much-needed catalyst to provide a rocket boost to transaction levels. Past holidays have seen a significant level of activity but the feeling is often that they help those who were going to buy anyway, rather than inject brand new purchasers into the market. A holiday up until the 31st March 2021 will also put some significant strain on property market practitioners to ensure they can complete transactions within the timescale in order to secure the savings available.
While this is a short-term measure, it is to be welcomed, and we hope that it provides purchasers, particularly first-time buyers, with the confidence to go out and make their property-owning dreams a reality. We do however need to marry up this announcement with the provision of high LTV mortgages in order to help more people onto the housing ladder. And, at some point, I suspect that stamp duty will need a longer-term solution in order to help maximise the number of transactions in the property market.
What makes this announcement even more important is that it’s clear the Government has listened to the industry and brought in the changes with immediate effect. To do otherwise would have risked putting the housing market on hold again as, quite understandably, thousands of property purchasers would have held back from completing until they could secure the stamp duty saving. Given we have only just seen the market open up again this would have been a bizarre decision and there will be many in the property market who will be relieved at this outcome.
Rob Clifford, Chief Executive of Stonebridge