As the stamp duty holiday end looms, will it dampen the housing market?
Published: 26 November 2009
By MoneyHighStreet Staff Leave a Comment
Updated: 26 November 2009
The end of the stamp duty holiday is looming but as it ends will it dampen the fragile housing market improvement that has been over recent months?
Figures from moneysupermarket.com show the number of house buyers looking to buy a house under £175,000 (the stamp duty holiday threshold) has increased significantly over the last 3 months.
Whilst though there has been an increase in those searching for property below this £175,000 price tag, reality is that most properties for sale are well above this price.
When the stamp duty threshold moves back down to £125,000 it will make it far more difficult for first time buyers to get on the housing ladder, a problem exacerbated by the large cash deposits that banks now in the main require for mortgages.
Many are calling for the Government to extend the stamp duty holiday.
But it’s not just first time buyers that need help. As Hannah-Mercedes Skenfield of moneysupermarket.com comments ‘Recent news that if the Conservatives come into power they will raise the stamp duty benchmark to £250,000 to help first-time buyers is excellent news.
However, this should be extended to all purchasers – if next time buyers are not able to move due to stamp duty costs, then there won’t be any available properties for first time buyers to snap up.’
People are trying to return to the housing market as is shown by an increase in the number of searches for properties in the other stamp duty bands. In the next band, between £175,000 and £250,000 the number of searches since September has risen by 13% and between £250,000 and £500,000 it has risen by 14%.
The Government really does need to seriously consider what it is doing with the Stamp duty threshold and extend the holiday to ensure these positive signs we are seeing and not dampened.
As Hannah-Mercedes adds though the ‘adoption of a regional benchmark system would be the most useful approach to ensure those living in high property value areas are not unfairly penalised and excluded from stamp duty extensions.’