reallymoving comments on Stamp duty cuts announced today

Rob Houghton, CEO of home mover comparison site, reallymoving, comments on Stamp duty cuts announced today.

“I’m pleased these stamp duty cuts are immediate and permanent, giving the market the certainty it needs and boosting the confidence of homebuyers as rising borrowing costs begin to bite. A jump in the First Time Buyer zero rate threshold is particularly good news for those in the south of England who will now avoid the tax altogether in 73% of cases, helping them with the enormous challenge of upfront costs. But the cuts will be of little to no benefit to those in the Midlands and the North where prices are lower, which seems very out of tune with the Government’s Levelling Up agenda.

“Our data shows the proportion of buyers seeking conveyancing quotes that are First Time Buyers has declined from 56% at the start of this year to 52% in August, as the cost of living, stricter lending criteria and rising borrowing costs have pushed home ownership further out of reach. These measures will help First Time Buyer share recover in the short term, but my fear is it will continue to fuel rampant house price inflation and, with borrowing costs only heading one way, home ownership will become more unaffordable over the longer term.

“Targeted incentives such as tax cuts for the most energy-efficient homes, or for particular buyer groups such as downsizers could have been very effective. Today’s announcement will help encourage downsizers but scrapping the tax altogether for this group would be the simplest and most cost-effective way of freeing up the housing market, incentivising older people to move into more suitable homes and reducing competition among families for larger homes. When a larger house gets sold it enables a chain of transactions and the lost stamp duty revenue would be more than recovered by boosted transaction levels across the market, not to mention the release of vast equity by over-65s which has been locked into property for decades with no benefit to the wider economy.”

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Main article photo courtesy of Pixabay