The stamp duty changes set out by Chancellor Rishi Sunak in his summer statement yesterday will have long-lasting effects and could potentially lead to the property market making a more steady recovery according to Lynda Clark, chief executive of the First Time Buyer Group.
Clark and other key industry figures have been reacting to the news that stamp duty has been scrapped for all properties below £500,000. These changes, the Treasury claims, mean that 90% of those moving property or getting onto the property ladder this year will pay no stamp duty tax with the average saving from these measures being around £4,500.
Before the changes to stamp duty, which were effective from yesterday, first-time buyers paid tax on properties over £300,000 or £500,000 in London.
Clark said: “The proposed changes to stamp duty will unquestionably be warmly welcomed by first time buyers – especially those with families looking for more space in their first home. The knock on effect will also be helpful to first time buyers – as homeowners may now take the opportunity to make a move into a bigger home, therefore freeing up more starter homes for purchase.
“We know that young people in particular are increasingly likely to suffer as a result of economic hardship, and so the removal of an additional tax when buying a home will prove to be a lifeline.
“The stamp duty changes, while temporary, will have long lasting effects and will encourage buyers to go ahead with their purchase – and in turn, the property market can make a more steady recovery.
“Timing is of the essence here though and any doubt in these plans, or delay until Autumn, could lead to buyers putting off their purchases until later in the year – which could actually do more harm than good.”
Becky Munday, founder of Munday’s estate agents, also welcomes the stamp duty changes, claiming them to be a “lifeline”.
Munday added: “We welcome changes made by the Chancellor to stamp duty, this will certainly be a lifeline to the industry as buyers will be further incentivised (the interest rate cut earlier in the year was well-received) to buy, and to buy now. Likewise, recently hikes in stamp duty has been detrimental to stock, as buyers who are asset rich but cash poor have been unable to move due to the high costs associated.”
Lynne Smith, sales and marketing director at Fernham Homes, believes that it will not just be first-time buyers who will benefit from these changes, but smaller housebuilders too.
Smith said: “A stamp-duty holiday will help so many people, including smaller housebuilders like us, who are helping to increase supply of housing in the South East so we welcome the Chancellor’s announcement. Saving for a deposit and then stamp duty costs are the biggest barriers for people getting on to the property ladder and this will aid so many people’s plans to buying their own home.”
Santhosh Gowda, chairman at Strawberry Star Group, agrees: “For house builders, a strengthened sales pipeline will encourage future investment in new homes, following the government’s previous announcement to clear hurdles around planning applications. The stamp duty holiday is a well-thought out move considering the prevailing circumstances, which have impacted the housing market. The announcement is timely, and will help all types of house buyers.”
This post has originally been featured in Property Wire.