The stamp duty holiday is now in its tapering off period, which means that it is an apt time to look back on how it impacted the market.
There is no denying the stamp duty holiday has affected the housing market in London, helping many people to buy property in the capital. For some buyers, the process became more affordable, and at Holmes Estate Agents, we are pleased to say we have helped many buyers, vendors and even landlords in the past year or so.
We have a good feel for what is going on in the local area, but we also stay in touch with the latest studies from noted names in the market.
Zoopla is one of the leading property portals in the country, and they have examined the impact of the stamp duty holiday.
What do Zoopla say?
Key takeaways listed by Zoopla on this matter include:
The amount of tax paid by people buying a new home has nearly doubled despite the tax relief brought in by the government due to Covid-19
Buyers paid a total of £2.06bn in stamp duty in the 3 months to the end of June - 90% more than in the same period of 2020
Only 37% of people buying a home paid stamp duty during the period, compared with 64% a year earlier, and yet the value of the tax collected almost doubled
Significant statistics of the end of the full stamp duty holiday period
In the three months to the end of June 2021, there was a 175% increase in property transactions
59,600 properties were purchased at a price of more than £50,000 in the three months to June 2021, which is significantly higher than the 13,000 bought at this price in the three months leading to June 2020
An additional £485 was spent by people who purchased buy-to-let property or a second home, with the 3% surcharge not being covered by the stamp duty holiday
A new surcharge of 2% was imposed (on 1st April) on overseas buyers purchasing a home in England or the North of Ireland, raising £19m
Calls for stamp duty to be scrapped
Alexander Hammond of the Institute of Economic Affairs has told the Express newspaper that the duty causes so many distortions in the market the government should consider axing it.
Alexander Hammond of the Institute of Economic Affairs spoke to the Express newspaper, saying; “Policies such as stamp duty land tax make purchasing a home more expensive and, as it penalises people moving houses, it acts as a disincentive for older people in bigger homes to downsize. Partly as a consequence of this distortive policy, more than 50 per cent of UK households are under-occupied.”
Alexander Hammond continued by saying; “The stamp duty holiday for homes under £500,000 ended on June 30, however, the popularity of the policy coupled with harmful impact the tax has on our society means the permanent scrapping of stamp duty land tax should be considered.”
Hammond has also called for planning laws with respect to house building to be relaxed, and he said; “The unaffordability of houses today represents a colossal failure of government policy that is having a damaging impact on our society. A record 42 percent of adults under 34 live with their parents, a further 60 percent of those under 44 noted the high cost of housing has delayed them achieving big life goals such as marriage, and there’s even evidence that high house prices are adversely impacting the UK’s fertility rates.”
Whatever happens next in the South West of London housing market, we are here for you.
We have considerable experience and expertise in the South West of London. We are ideally placed to help vendors, tenants and landlords during this challenging time. If you have any questions regarding the South West London property market, please get in touch with Holmes Estate Agents today.