On 8th July, the chancellor Rishi Sunak announced measures to boost the housing market in the form of a temporary cut to Stamp Duty (SDLT). The cut, which took immediate effect, brings in a £500,000 tax free threshold, with Stamp Duty only coming into play on purchase prices over and above this. The Chancellor’s announcement relates to properties in England and Northern Ireland, and will remain in place until 31 March. Since the Chancellor’s Summer Statement, Wales and Scotland have also announced similar increases to Land Tax thresholds.
The Stamp Duty cut is something that many in the property industry have been calling for for some time, including our regulatory body, the RICS, as a way to stimulate the property market in these difficult times. There are a number of ways in which the cut will help the residential property sector…
Impetus to move
One of the main immediate benefits of the cut will be to provide an extra impetus to homeowners who were considering a move, and even to encourage those who may not have been looking to move to do so. The net effect is likely to be more properties on the market and a greater level of transaction activity.
Landlords and developers
In addition to applying to owner occupiers, the cut also applies to those purchasing residential property on a buy to let basis or as a second home. Although the additional 3% Stamp Duty on second homes and buy to let properties will apply, landlords looking to extend their portfolios or those wanting to buy holiday properties will benefit from the cut on any properties over £125,000.
Many buyers will now stand to benefit from saving a significant amount on their purchase. The treasury estimate that 9 out of 10 buyers will now pay no stamp duty at all, and those buying properties priced above £500,000 will still be much better off. As a result, some buyers may be able to increase their budget; paying a little more to secure the property they really want. This is good news for those selling properties.
The home improvement industry
Every house move that takes place also boosts the economy, with estimates suggesting additional spending worth about 5% of the house value. The knock-on effect of more activity in the residential property market will stand to benefit retail sales in the home and interiors sector, as well as boosting the construction industry and general trades people.
Even before the cut in SDLT was announced, our residential surveyors had busy diaries; undertaking valuation reports and condition survey reports across Lancashire. It is expected that the boost from the SDLT cut will only further add to this.
Our team offer a range of reports, including Valuation Reports, RICS Homebuyer Reports and Building Survey Reports. We are happy to offer advice on the suitability of these, and to provide a quote. Get in touch with us here.