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TODAY'S OTHER NEWS

Stamp Duty tax break MUST happen, surveyors tell government

A large majority of property professionals polled by the Royal Institution of Chartered Surveyors say a stamp duty holiday would be an effective way of kick-starting the housing market.

RICS has welcomed the re-opening of agents’, conveyancers, surveyors and removal company offices but it warning that the government must do more to bolster demand and house building.

Some 62 per cent of those responding suggest a stamp duty holiday would help the market recover post-pandemic, by lifting sales and leaving prices relatively unchanged.  

On average, respondents anticipate sales would rebound to their previous levels in around nine months.

In its monthly snapshot of housing market activity for April, RICS says that - unsurprisingly - a net balance of 93 per cent of respondents reported a decline in new buyer enquiries over the course of the month, dipping further from a net balance of 76 per cent in March. 

New instructions also continued to fall, with 96 per cent of contributors reporting a drop rather than rise in new properties being listed for sale. This is the weakest net balance reading since the inception of the RICS measurement in 1999.

As far as prices are concerned, following a run of three successive months of positive readings, the RICS headline house price balance fell into negative territory with a net balance of 21 per cent noting a decline in prices. 

Some 35 per cent of the survey participants believe that when the market reopens, prices could be left up to four per cent while around four in 10 take the view that prices could in fact fall by more. 

They suggest that a recovery in prices could take a little while longer than sales levels, with respondents suggesting, on average, prices will recover in 11 months.

“Not surprisingly, the latest survey shows that housing activity indicators collapsed in April reflecting the impact of the lockdown. Looking further out, there is a little more optimism but the numbers still suggest that it will be a struggle to get confidence back to where it was as recently as February. Moreover, whether this can be realised will largely depend on how the pandemic pans out and what this means for the macroeconomic environment” explains Simon Rubinsohn, RICS’ chief economist. 

His colleague Hew Edgar, head of UK government relations at the institution, returns to the stamp duty issue by saying: “The data suggests that our proposal for a stamp duty holiday would be a successful change that would boost transactional activity, helping people move home. 

“There are, of course, other options available to government as they reopen the market, notwithstanding stamp duty options such as reducing or removing stamp duty for downsizers that would kickstart market fluidity, and we look forward to continuing conversations as the market starts to move again.”

  • Michael Riley

    Er.... why do you think they have prioritised getting the housing market going?

    Could it be they desparately need Stamp Duty revenues?

    The squeezed middle is about to get choked to pay for furlough etc....expect higher stamp duty in niches where the upper middle classes spend their excess cash. holiday homes, buy to lets and probably a host of taxes around Airbnbs for landlords and possibly travellers. The latter happens in hotels around the world already.

  • Matt Faizey

    Percentages are kinda useless unless we know the numbers involved.

    Having 90% approval means diddly if say 10 people responded to a survey when 2000 were asked.

    Moreover, just to clarify. After a very strong start to the year fort the housing market, and now after 2months of unprecedented stimulus there are calls to kill tax revenues from SD?

    Despite there being precious little evidence of anything other than a housing market 'stayed' from where it was?

    If we want a stimulated market less get back to building 300k new homes per year and have supply at least keep up with demand. Ideally outstrip it.

    Make a call for H2B to go for all homes instead of just new build.

    RICS could call for the supply side issues to get sorted instead of demand side. All that is being done and asked for is an increase to house prices!

    Let's review the title here and change to 'widespread call to introduce stimulus in order to increase house prices'

    Wonder how that'll go down with the masses?

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    If Surveyors are so keen to increase transaction volumes post COVID why don't run a campaign to return the market to its historica valuation multiple? That would be far more effective in getting buyings and selling going.

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    The problem with all changes of this type to house taxation is that it causes spikes in transaction volumes which, inevitably lead to an unstable market. Ask any conveyance what happens when there's a report on the news about SDLT rates changing, and they will tell you about the flood of calls they get from clients wanting to bring forward, push back, or withdraw from a purchase. What we need now is sustained growth and stability in the market and not the inevitable chasm that will result when the SDLT holiday ends.

  • Paul Barrett

    As long as it makes economic sense to spend SDLT monies on improvement to an existing property then people won't bother moving.
    Far better to spend £30000 on a loft extension etc than wasting it on SDLT for a slightly bigger property.

    With PD rights it makes far more sense to improve rather than move!


    The last thing Govt needs is for OO to improve rather move.
    Make is cost effective to move and then people will.
    SDLT is a major cost consideration for those contemplating moving.
    Those that DON'T have to move won't even though they might if SDLT was reasonable or even abolished.
    Moving property generates an awful lot of economic activity from which Govt earns vast amounts of tax from.

    Govt should remove this particularly onerous SDLT from all or most property transactions.
    That would generate more than enough taxable growth to replace no longer collectable SDLT.
    But hell will freeze over before that ever happens!!

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    The only reason they have opened the housing market whilst infection levels are still to high is because they want the stamp duty, they will not reduce it.

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