To help reinvigorate the housing market, our Chairman, Nick Leeming, has called on the Minister of State for Housing, The Rt Hon Christopher Pincher MP, to consider a stamp duty holiday for the rest of the year.
As Chairman of a national estate agent of more than 40 branches, I understand the challenges Covid-19 has created for businesses, large and small, across the UK, including those within the property industry.
In order to abide by social distancing rules, many prospective sellers and buyers have been asked to sit on their hands until lockdown restrictions have eased. Yet, with more than 99,000 residential transactions made in March alone, it is clear there is still appetite to move and confidence in the market. Demand, however, is dependent not only on the confidence of buyers in believing that they have a secure financial outlook, but also on their ability to meet the combined costs of the purchase that they are agreeing to. Stamp duty tax remains one of the biggest barriers for greater movement within the property market and therefore is one of the key challenges to address. That is why I made the decision to write to our Housing Minister Christopher Pincher, calling for a stamp duty holiday for the rest of 2020.
HMRC’s revenues from residential stamp duty in England and Northern Ireland totalled £8.27bn in 2019, down from £8.56bn in 2018. 2020 will show a very different picture with far fewer sales, which would in turn lead to a further, substantial fall in these revenues. The opportunity cost of waiving stamp duty over the rest of the year is therefore relatively low. However, with estate agents deemed to be one of just a few high street occupiers to offer the greatest boost to the economy, a stamp duty holiday could spark an increase in spending across the UK and could actually bear more fruit for Government further down the line as the economy sets to repair itself.
The introduction of a stamp duty holiday would act as one of the greatest, single incentives for buyers to contract in the current year and so is the most effective tool available to help restore residential transaction numbers. An increase in property transactions would also have a positive, knock-on impact on a large network of suppliers, from mortgage brokers, buying agents and conveyancers, to removal companies, builders, and tradespeople.
Looking ahead to the rest of the year, we can expect to see a bounce in the Autumn as pent-up demand continues to build, which would be heightened further with the introduction of a stamp duty holiday. With people currently spending far longer in their homes than usual, many homeowners are likely to be getting itchy feet where their current property is no longer suitable for their needs or lifestyle, while must-movers will continue to drive activity in the property market, with those planning on growing their families, for example, pushing transactions through quickly.
The housing industry has been calling for a change to punitive stamp duty taxes for many years, but a change to it now could be more significant than ever. If we are to avoid a long period of effective standstill and the further economic fall out that Covid-19 will entail, then now is the time to act.
The Housing Minister has since responded to say that Jackson-Stops' letter has been shared with HM Treasury.
