Stamp Duty should be scrapped for 18-months to boost the market ahead of the Brexit deadline in March 2019 and beyond, a senior agency executive claims.
John Phillips, group operations director at Just Mortgages and Spicerhaart, said a Stamp Duty suspension for everyone would help the struggling housing market.
He said: “The Stamp Duty cut has worked for first-time buyers but we need similar incentives for the rest of the market.
“I would like to see an 18-month suspension of Stamp Duty across the board.
“This gives the market seven months or so before the Brexit deadline in March and a year afterwards to let things settle.”
Deadlines in the property market have had an interesting history: the dropping of double-interest mortgage relief (MIRAS) announced in advance by then Chancellor Nigel Lawson in the Budget allowed for a huge boom, before a spectacular bust. Years later, the stated introduction of the 3% Stamp Duty surcharge on second home purchases in April 2016 led to a surge of purchases in March before a flat period.
However, Phillips’ call for reform of Stamp Duty follows ex-Foreign Secretary and Tory MP Boris Johnson calling for action on Stamp Duty in his Daily Telegraph column. Yesterday Spicerhaart boss Paul Smith said that there should be an overhaul of the system.
The latest suggestion comes as data from banking trade body UK Finance suggests the mortgage market hit a lull in June as lending to both first-time buyers and home movers dipped.
Lending to first-time buyers was down 3.6% annually during June 2018 to 34,900 approvals, while the number of home move loans granted fell 7.9% to 33,700.
Buy-to-let approvals continued to drop, down 19.4% in June year-on-year to 5,400.
Meanwhile, remortgages continued to dominate the market, with approvals up 8.4% annually to 37,400 during June.
Jackie Bennett, director of mortgages at UK Finance, said: “Despite a boost in recent months, speculation of a base rate rise saw the market remain relatively subdued with year-on-year declines in activity among both first-time buyers and home movers as customers adopted a ‘wait and see’ approach.
“House price inflation has moderated in recent months but still remains above earnings growth, and so affordability is still a challenge for would-be borrowers.
“Although the full impact has yet to be felt, tax and regulatory changes continue to bear down on borrowing activity in the buy-to-let purchase market.”
Comments (8)
They need a proper plan.
Not a short term fix, as this unsettles the market after the period ends.
They’ve been looking for “proper fixes” now for near 60 years, PPITE.
Just when the public get accustomed to the current system – they chuff it up and move everything.
Bit like Tesco. One week you’re up the ham aisle… the next week there’s tellys where your honey cured was.
What’s that about FFS?
The issue with stamp duty “holidays” is that as soon as they come to an end house prices go up to compensate. The last one had prices pegged at £249,995 to avoid sdlt which kicked in at £250,000, as soon as “holiday” ended prices went up to £259,995.
PeeBee I agree, one rate across the board, the additional 3% for 2nd properties is wrong but equally so is the higher band for top end properties; easier for anyone to calculate. Incidentally I have spoken with 2 prospective investment buyers this morning who have inheritance monies which they are looking to use to buy properties to let out, both had spoken with their solicitors and other estate agents before speaking to me and had not been made aware of the additional 3% which came as a bit of a shock to them!
Been banging on about a blanket rate since the calculation methodology changed in ’97, jeremy1960.
Even before then, I couldn’t see why low-value properties were exempt under a threshold. Surely they still need to be ‘stamped’ – so there should be a duty to pay.
Ho-Hum… here we go again with the old Stamp Duty cop-out.
I’ve just popped down the other pub and had a rummage behind the bog door, which is where I used to put a lot of stuff before Frau Renshaw opened this wonderful new establishment.
Here’s something I scribbled in 2011:
“Introduce a level playing field. ONE rate of Duty ACROSS THE BOARD – NO EXCEPTIONS. Anyone posting here or reading this who has ever sold a property on behalf of a seller knows that the buyer offers what they can afford. A sale is made as a total package – any buying costs, including Stamp Duty, are factored in to the offer and eventual agreed price. So what is the problem? IF a buyer cannot ‘afford’ a property with SD added – they couldn’t afford it anyway.”
Discuss?
I don’t have a problem with stamp duty other than quelling the demand from private landlords who own a couple of properties and are supporting social housing. BIG MISTAKE GOVERNMENT.
Lots of talk about Stamp Duty… I know it is not as simple as this but why has nobody ever poroposed a simple ‘switch’ and add an equivalent duty to the sale rather than the purchase? Might also have a double whammy effect of keeping prices in check?
“…why has nobody ever poroposed a simple ‘switch’ and add an equivalent duty to the sale rather than the purchase?”
Where is the vendor going to expect the money for this duty to come from, Leespoon?