While proposals to temporarily suspend the tax on homes up to £500,000 are broadly welcomed, there are concerns the support may not be implemented soon enough to benefit the market
Speculation the government is to introduce a stamp duty holiday has been met with cautious optimism by the mortgage and property industry.
While proposals to temporarily suspend the tax on homes up to £500,000 are broadly welcomed, there are concerns the support may not be implemented soon enough to benefit the market.
The chancellor, Rishi Sunak, is expected to announce the six-month stamp duty suspension in his Summer Economic Update on Wednesday. It is thought he will increase the threshold at which homebuyers start paying stamp duty from £125,000 to up to £500,000.
But Jeremy Leaf, north London estate agent and former RICS residential chairman, was among many who thought these proposals must be introduced with immediate effect in order to have the greatest impact.
He said: My message to the chancellor would be: an announcement on relieving the stamp duty burden would be welcome but please either announce that you are changing it one way or another.
Please don’t say you are thinking about it or it may be introduced in a few months. Otherwise, you will stop the market in its tracks as buyers and sellers wait to see what will happen before making decisions and you will kill off any or much of the growing increase in activity we have seen since lockdown restrictions were eased, he said.
Leaf wants to see any stamp duty holidays targeted at first-time buyers who he described as the ‘lifeblood’ of the market.
Currently first-time buyers are exempt from stamp duty on homes under £300,000 in the UK, and under £500,000 in London.
And online mortgage broker Trussle said it saw mortgage applications with a property of up to £500,000 increase by 40% when comparing the first six months of 2019 and 2020.
Miles Robinson, head of mortgages at Trussle, said: We’re living in a time where more than half of the UK population now wait until the age of 34 before owning their first home, so this will be a relief to first-time buyers hoping to get onto the property ladder during these uncertain times.
“It’s hugely encouraging that the government is looking at ways to support this under-served group in the housing market.”
Meanwhile Franz Doerr, founder and CEO of flatfair, echoed the sentiment that the change needed to be immediate in order to also benefit the rental sector.
Cuts to rates cannot wait until the autumn, as the entire market will be paralysed by prospective buyers waiting for their discount, he said.
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