Chancellor announces stamp duty holiday

The Chancellor has announced an immediate temporary holiday on stamp duty for the first £500,000 of all property sales in England and Northern Ireland.

As part of his economic update, Rishi Sunak revealed the increase on the stamp duty threshold up from £125,000 will run until 31 March 2021.

He told MPs that nearly nine out of 10 people buying a home this year will pay no stamp duty at all, and suggested the people in the UK “need to feel confident about the housing market.”

Noting that property transactions fell by 50% in May, Sunak said the average stamp duty bill will fall by £4,500.

Zoopla research and insight director, Richard Donnell, suggested the immediate increase in the stamp duty threshold will “help sustain the rebound” in housing market activity across England.

“The benefits will be immediate; nine of 10 transactions in England will no longer be subject to the tax and in London and the South-East, home to more expensive properties, homebuyers can save up to £14,999 overnight,” Donnell commented.
“The Government will expect the change to stimulate more housing sales over the second half of the year and that savings made by buyers will be reinvested in home improvements, white goods and furniture, rather than bidding up the cost of housing.”

Accord Mortgages director of intermediary distribution, Jeremy Duncombe, said: “Anything which encourages confidence in the housing market is welcome and for some borrowers, today’s decision will be the catalyst they need to progress with a house move.
“However, raising the limit to £500,000 will not ‘fix’ the market. There are a number of other measures which need to be given further thought and consideration by the government to make a longer term difference to those wanting to secure their own home.
“Likewise, to support more first-time buyers, a review of the current stress testing measures could make the shift from renting to owning more accessible for those who have a proven track record of meeting monthly rental payments.”

Audley Group CEO, Nick Sanderson, added that the stamp duty cut is a “short-term fix” for a housing market that needs a “long-term cure”.

“We have been promised radical housing and planning reforms and these mustn’t be swept under the carpet in favour of attention grabbing short term initiatives,” Sanderson added.
“If the Government is truly committed to solving the housing crisis and stimulating movement both up and down the property ladder, it needs to address some fundamental flaws.
“There is a chronic shortage of specialist housing for older people in the UK. It’s all well and good giving people a financial incentive to move, but if the properties aren’t available, the numbers won’t ever add up.
“The Government must give the green light to the development of more specialist retirement properties and mandate the provision in any new developments. Only then can we accelerate fluidity in the housing market by freeing up family properties and giving people all across the country access to the homes that are appropriate for their current needs.”

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