Earlier today, chancellor Rishi Sunak announced that the threshold for stamp duty relief on property transactions would be increased to £500,000 in England and Northern Ireland.
The general reaction to the news among the mortgage industry was positive, with hope that the decision will get the market moving quickly after months of struggles amid the Coronavirus pandemic. However, there were also calls for the duration of the stamp duty cut to be extended.
HSBC UK head of buying a home Michelle Andrews says: “This move by the Chancellor of the Exchequer is one that will inject additional life into the housing market, making moving on or moving up the property ladder a bit more affordable for many. In the short-term, this will have a multiplier effect with many in property chains seeing the benefit.
“Plus, there is likely to be additional economic activity in related areas, from people using removal firms all the way through to the need to purchase new furniture or essentials for the new property, as well as those needing to get essential work done internally and externally or simply where home-owners want to put their own stamp on their new home.”
Coreco managing director Andrew Montlake says: “With the changes to Stamp Duty announced Wednesday, the Chancellor has provided another welcome boost to the property market and reiterated exactly how important bricks and mortar is to the health of the economy and broader consumer sentiment.
“It is a relief that the stamp duty changes come into effect immediately, although we are concerned that the March 31 deadline may be premature.
“If the economy hasn’t stabilised by April as planned, house prices could come under extra pressure when the stamp duty holiday comes to an end.
“Holiday periods tend to result in an artificial time of higher demand, driving up prices and therefore reducing the real impact of the changes.
“For now at least, it is good news for many prospective buyers around the country and will go some way to offset the reduction in the number of mortgage products available at 90 per cent LTV, giving buyers a little more cash for a deposit. It may also act to give lenders more confidence to make available more higher loan-to-value products.
“There is also the question over whether stamp duty changes alone will really solve housing market woes at a time when many borrowers are faced with difficulties obtaining mortgages due to job insecurity, are deemed “mortgage prisoners”, or are faced with issues around cladding.”
Phoebus Software head of sales and account management Adam Oldfield says: “The government has shown today that it is not prepared to wait until the budget, as had been predicted, to announce changes to stamp duty. By raising the threshold to £500,000 the Chancellor has given a lifeline to not only potential home movers and purchasers, but also to the whole of the housing market. The intention is to protect, support and create jobs and by effectively abolishing stamp duty for properties up to £500,000, even temporarily, it is clear that the government understands how important housing is to the UK’s overall economy. This is a vital boost for the market and one that needs to be capitalised upon, while it is available.”
O’Neill Patient managing director Adam Forshaw says: “We’re thrilled with the Chancellor’s clear announcement on Stamp Duty – it’s a hugely positive move that will really get the property market moving. We are geared up for a burst in activity as homebuyers take advantage of this window of opportunity.”
Newcastle Building Society customer director Stuart Miller says: “This is fantastic news for people looking to move home or buy a home for the first time and is very welcome news for the housing sector and the jobs within it, which have been so badly affected by the COVID-19 pandemic.
“For the North East in particular, it means that almost 100 per cent of first time buyers will be able to avoid paying stamp duty based on average property prices across the region.”
Family Building Society chief executive Mark Bogard says: “This tax has been gumming up the housing market for a long time and while the Chancellor’s announcement is to be welcomed it does not go far enough.
“The key to giving young people and the less well off the chance to own a home is to improve the supply side.
“Making the exemption temporary is no panacea and apart from making the move permanent much more needs to be done to persuade the elderly to trade down.
“Changes to planning regulations are essential but will take time. The obvious quick route to improving supply is to make it more financially viable for older people occupying homes that are too big for them to move home.
“So, incentivise them by cutting stamp duty for when they choose to move to smaller properties. Behavioural economics shows us the people in later life simply don’t want to write a large cheque to the government irrespective increases in property values.
“This would help free up housing to allow the whole range of home buyers from first timers to those needing bigger family homes to move house.
