Stamp Duty holiday ends ‘one of few advantages for ...

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16 July 2020

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Stamp Duty holiday ends ‘one of few advantages for young buyers’

A think tank says the stamp duty holiday introduced a week ago is understandable and may be helpful to the housing market - but it does little for first time buyers.

A week ago Chancellor Rishi Sunak announced that stamp duty exemptions in England would extend from the previous level of £125,000 and below, to £500,000 and below.

Other, broadly-similar changes have been made in Scotland and Wales.

“The Chancellor’s threshold increase has (temporarily) removed one of the few advantages young people had in the housing market” according to an analysis by the Resolution Federation.

“And in cash terms there is little gain with London being the only region where the average first time buyer will benefit, by £6,000.”

More generally the federation admits that the stamp duty holiday was a predictable and popular response to housing market problems where “sales have fallen off a cliff since the pandemic took hold.”

But it warns that historically, transaction volumes are not particularly sensitive to stamp duty changes, although it accepts that this new holiday is more extensive both in scale and length than the stamp duty relief introduced during the global financial crisis in 2008.

The biggest beneficiaries, in cash terms, will be buyers in London and the south east, says the federation.