The industry has reacted angrily to the Chancellor declining to change stamp duty despite pleas from agents and suppliers ahead of the Autumn Statement.
Anthony Hesse, managing director of Property Personnel, says slashing duty would have been Hammond’s most effective ‘fix’ for the country’s finances.
“There is no more economically stimulating activity than house sales and purchases - so it would have been a tax cut that would largely have paid for itself. As a result, the continued stifling of the market is a missed opportunity for both the estate agency sector and the country.”
He says this would have been a boost for agents and all other aspects of the industry.
“There are dozens of related professions that start to do well when estate agency is flourishing. Surveyors, removal companies, solicitors, builders, plumbers, electricians, kitchen fitters and decorators all benefit from more property transactions and all provide an increased tax take for the Treasury” he says.
Rory O’Neill, head of residential at Carter Jonas, says current inactivity in London’s high-end market can be traced back directly to the SDLT reforms of November 2014.
“Stamp duty is the only negative stalling the market - even the attractiveness of the pound to dollar based buyers, affordable borrowing and pent up demand cannot overcome the crippling transactional costs of moving house” he said, promising he would lobby for it ahead of Phillip Hammond’s Spring 2017 financial statement.
Craig Vile, director at automated valuation service ValPal - a product from Angels Media, publisher of Estate Agent Today - says Phillip Hammond’s announcement lacked the bold measures required to stimulate the market.
“Disproportionate stamp duty taxes at the upper end of the market over the last two years have done more damage than anything else in restricting transactions, including Brexit” he claims.
“We need to see policies in place to enable and increase a free flow of transactions from the top end of the market to the bottom. We would call for reduced stamp duty across the board particularly on second homes and more help for residential developers” says Vile, who fears a risk of a fall-off in transactions next year without a stamp duty boost.
Mark Harris, chief executive of mortgage broker SPF Private Clients, says: “”It isn’t just about rich people. Punitive stamp duty charges higher up the chain stalls the overall market - and prevents people moving up and down. It is questionable whether higher stamp duty has really worked as the take at the top end has certainly fallen.”
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Far as I'm aware, it will be the changes to mortgage interest tax relief that will have the biggest impact on landlords and other interested parties. The stamp duty changes, by and large, have been fairly easily absorbed, with the buy-to-let market - despite the scare stories - actually showing signs of renewed strength. Yes, at the top of the market buyers have been harder hit by the stamp duty changes, but I'm not sure I agree with this idea of trickle down - that if the very prime end of the market isn't doing as well, this will filter down towards the rest.
Seems like too convenient an excuse to me.
Not sure why there is so much anger, either - Hammond was always very unlikely to reverse these changes. Can't see why people are so surprised.
Indeed, Algarve. The fuss over stamp duty is another storm in a teacup, just like all the hoohaa over the ban on letting agent fees. It works perfectly well in Scotland. And, believe it or not, rents haven't soared north of the border.
Lots of threats from landlords about passing on the cost to their tenants, but they sound like empty threats to me.
The lettings agency market model is based on some agents taking a greedy double helping in terms of fee from both sides. I thought the definition of an agent was to act for one side only and hence take a fee from one side only. Still a good conflict of interest does not stop some of our keener brethren.
Also it seems to me that some agents offer landlords a unique selling point based the ability of that agent to deduct as much as possible from the deposit at termination by way of spurious claims for damage when in fact the deterioration is due to legitimate wear and tear. This retention of deposit monies amounts to a an undisclosed rental premium therefore. I dont buy the argument that the DPA stops all that, cos it doesnt.
How banning agents upfront fees to tenants is either a fiscal or monetary measure relevant to be included in an Autumn statement, I dont know. A bit of pathetic political posturing I think.
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