Now is the time to review the banded rates of stamp duty to ensure that the levy is fair and works for the many and not the few, according to Propertymark.
The tax holiday on stamp duty rates was introduced in July 2020 but ends in England and Northern Ireland today.
The initial holiday meant home buyers did not have to pay stamp duty on the first £500,000 of purchase, falling to the first £250,000 from 1 July.
However, the nil-payment threshold will return to the pre-Covid level of £125,000 from tomorrow.
Market demand, sales and average prices have all risen since last July, with the holiday giving the sector a shot in the arm.
Analysis from Propertymark’s Housing Market Reports have found market demand has been boosted since the stamp duty holiday was introduced.
Figures show the average number of buyers per branch a month rose by more than 100 between July 2020-August 2021 during the holiday.
There was an average of 445 buyers per branch during that time, which is higher than the average of 340 between April 2019 and June 2020 in the 14-months before the stamp duty holiday.
Sales agreed per branch also shot up 41% to an average of 11.3 a month during the stamp duty holiday between July 2020-August 2021, higher than the eight in the 14-months prior.
And fewer homes sold for below the asking price and more above during the stamp duty holiday, showing the sector turned from a buyers’ market to a sellers’ market.
Between July 2020-August 2021 when the holiday was introduced, 45% of monthly agreed sales were less than the asking price, as opposed to 80% in the 14 months prior.
More instead sold above the asking price – an average of 19% during the stamp duty holiday as opposed to just 4% in the months before it was introduced. At its peak, 40% of property sales agreed were above the asking price in June 2021.
Mark Hayward, chief policy advisor at Propertymark, said: “When we campaigned for the introduction of a temporary Stamp Duty Land Tax holiday, we hoped it would help increase confidence and consumer spending in the housing market and play a crucial role in restarting our economy.
“It has done just that and has been a great success, creating a healthy and flowing market which has encouraged more people to buy and sell – as evidenced by our own Housing Market Reports which have seen an increase in the average number of buyers and sales agreed.
“With the holiday at an end, it is now timely to review the outdated levels at which people start paying stamp duty to reflect market demand, average house price and wage growth, given the basic, pre-Covid rates have not changed since 2014.”
Stamp duty should be abolished and replaced with a revised council tax. Currently band H encompasses houses in London with a value from about £1.5m . Houses worth £40m pay the same. It should be more progressive and spread more evenly across the country.
You must be logged in to like or dislike this comments.
Click to login
Don't have an account? Click here to register
Interesting thought, but how would that work in practical terms?
House values change so quickly and can change so dramatically (look at the last 18 months) that councils would need to increase the council tax by significant amounts each year, making it difficult for people to know whether, in three years times, they could afford to live in their home because their council tax has increased by 36%.
Additionally, house prices can change due to things other than market conditions. If I add an extension. If I refit my kitchen. If I convert my loft. If I replace my up and over garage doors with electric shutter doors. Councils would know about some of these changes (extension/conversion) and could work off a “guide” that an extension adds approx £x to the value whilst a conversion adds approx £y to it, but they wouldn’t know about other things like new kitchens and garage doors or brand new boilers being fitted and therefore the council tax rate wouldn’t represent the increased value of the property.
You must be logged in to like or dislike this comments.
Click to login
Don't have an account? Click here to register
So people with more expensive cars should pay more for fuel? So people with more expensive houses should pay more for gas, electricity, water? Fining people for being successful is progressive nonsense, a service is just that and should cost the same for all whom receive the same service Stamp duty is theft, much like most of our taxes “overt and covert” and is stolen from us all so that people who think they’re powerful and important can dole it out (no pun intended, but you’ll get the drift) to whomever and on what ever they justify in order to maintain popularity and voter adherence. GB is probably the most grossly over taxed country in the western world, supplying a feeding frenzy for the lazy, the indolent, the entitled, immigrants, single women with multiple kids, and the biggest civil service free-for-all ever. The civil service are laughing at us all as are those running the NHS (the biggest free-for-all) who clip the ticket on the plethora of supplies and services running amok in this cash cow. Its time to de-tax the UK, remove 60% of civil service jobs, most charities licking the cream of handouts whilst spending 5-7% on the disenfranchised (what a con) and all local government reduced by 70% (useless unaccountable excuse laden muppets) and all other non producers and scroungers who accuse people who earn and pay their taxes, of being greedy, but fail to see taking their money for no contribution as theft. As Thomas Sowell noted – “its hard to imagine a more stupid or more dangerous way of making decisions than by putting those decisions in the hands of people who pay no price for being wrong” Wake up UK its a con
You must be logged in to like or dislike this comments.
Click to login
Don't have an account? Click here to register
“Analysis from Propertymark’s Housing Market Reports have found market demand has been boosted since the stamp duty holiday was introduced.”
In other news, water is wet.
You must be logged in to like or dislike this comments.
Click to login
Don't have an account? Click here to register
There have been one (twenty) too many stories from various different ‘sources’ about how the market has been good – yes, we know.
You must be logged in to like or dislike this comments.
Click to login
Don't have an account? Click here to register