An estate agent and a building society have both advocated radical moves to reform stamp duty - and want Chancellor Phillip Hammond to consider their ideas for his Spring Budget next week.
Trevor Abrahmsohn, head of high-end London agency Glentree International, has written an open letter to Hammond saying that “the ineptitude of your predecessor” - former Chancellor George Osborne - had greatly distorted all sectors of London’s property markets thanks to his reform of stamp duty at the end of 2014.
"By exciting the markets in the lower prices, the vulnerable first time buyers have been further disenfranchised and the markets in the higher value ranges have been rendered stagnant and illiquid, with a 70 per cent reduction in transactions. This has caused a needless DIY recession in this sector, resulting in less stamp duty receipts for your Treasury” says Abrahmsohn.
“As property values drop, debt balloons in relation to it and everyone suffers as a result, particularly the lending institutions whose loan to value ratios go awry. This is a lose, lose scenario and I would urge you to take the courageous decision by dropping the higher rate of stamp duty by three per cent” he says.
“If I can’t persuade you to do this, would you at least consider legislating for both purchaser and vendor to split the stamp duty between them? Although this is a ‘sleight of hand’ method at least the purchaser will feel that under this arrangement, since the stamp duty tax has been effectively halved, this could be the very stimulus that the market requires” the agent suggests.
Meanwhile new research from the Yorkshire Building Society reveals that just 26 per cent of first time buyers bought properties worth less than the stamp duty threshold of £125,000 in 2016 - the latest fall from the high of 47 per cent recorded in 2006.
Despite reform to other parts of the stamp duty regime under George Osborne, the initial threshold has remained at the £125,000 mark - even though the building society notes that average house prices for the UK as a whole have risen by 35 per cent in the past decade.
The Yorkshire is therefore calling for reform, and wants the government to make stamp duty a sellers' tax - if the vendor paid it, there would be no cost for the first time buyer or those further up the property ladded.
The mutual says first-time buyers could save an average of £3,625 if stamp duty was paid by the seller, while those moving up the ladder could save an average of £4,154.