On Saturday 21st October The Times reported that Rishi Sunak plans to cut stamp duty in a bid to win over voters after a succession of by-election defeats.
It has been widely reported that the Conservatives plan to increase the threshold in which Stamp Duty is paid. As a result, homeowners could find it more affordable to move.
Currently the Stamp Duty threshold is £250,000 unless you are a first time buyer where stamp duty is not payable if property is worth less than £425,000 (unless the property’s value is greater than £625,000). Arguably, this indicates the market would be improved by supporting second-time buyers and enabling renters to escape the ‘trap’ – (Admiral Ackbar).
An announcement is expected to be made during the autumn budget planned for 22nd November or as part of the Conservative manifesto. Either way economist suggest Sunak should not reintroduce the Stamp Duty Holiday, as it is generally accepted this policy was in part responsible for over stimulating the economy leading high inflation.
Head of Suffolk Conveyancing Stuart Milbourne comments:
Whilst the idea of a Stamp Duty holiday maybe comfort to some people’s ears, such a policy will again over inflate demand and potentially lead to further increases in property prices. This will only make it harder for everyone wanting to buy a property to cover the increased monthly/overall cost. The key measure when is comes to house prices is wages/ wage growth. If wage growth stalls, and the cost-of-living crisis/inflationary pressures continue the disposable cash someone has to assign to a larger mortgage is simply not there. Housing needs to be at the top of government, housing needs to be affordable and with affordable housing you fix many other social pressures.
In conclusion, our symbiotic economy depends on many factors and whilst increasing the Stamp Duty threshold would be welcomed, another Stamp Duty holiday was both detrimental to the economy in the long term and to the conveyancing industry.
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