When the Chancellor of the Exchequer Rishi Sunak delivers his Summer Economic Statement this week, it looks likely that he will introduce a stamp duty payment holiday. Rumours suggest that most homebuyers will be exempt from paying stamp duty for six months, with the threshold rising from its current level of £125,000 to £500,000.
The news comes just days after Nationwide revealed via its house-price index that average property values suffered their first annual fall in eight years in June, dipping by 0.1 per cent. The impact of Covid-19 and the ensuing lockdown has resulted in the housing market grinding to a halt, with the Bank of England reporting that just 9,300 mortgages were taken out in May, a 90 per cent decline compared with February.
But will a stamp duty holiday for all buyers, if that is what is introduced, make a difference and get the market moving again? Given that most first-time buyers don’t pay stamp duty – they qualify for relief on properties costing less than £300,000 (up to £500,000 on properties in London) – one wonders how much of an impact a holiday for everyone will actually have. There is also a danger that if it isn’t implemented straight away but is brought in via the autumn Budget, it will put the brakes on the housing market as would-be buyers put decisions on hold while they wait and see whether it is introduced.
With the housing sector hit hard by the pandemic, any stamp duty relief will come as a welcome move. It could boost the sector if buyers and sellers have more money available because they are saving on stamp duty. Moving house is good for the wider economy. People hire builders, architects, buy furniture, pay removals firms – it ripples out and benefits the economy as a whole.
We will have to wait and see what the Chancellor decides to do but in the meantime, AWS Financial Services can offer advice to those considering buying who are looking for a mortgage. As whole-of-market brokers, we can source the right deal for your circumstances: please get in touch for more information.