August saw a report from the London School of Economics into the effect of stamp duty on the housing market. Stamp Duty Land Tax (SDLT) is payable when you buy your home, if the cost is more than £125,000. The current rates were introduced in Spring 2016, by Chancellor George Osborne.
Harry Singh, estate agent at Henry Wiltshire Hayes, says, “With London prices as they are, you will nearly always have to pay stamp duty when you buy property. Equally, with property prices steadily growing right across the country, SDLT is ceasing to be a tax on the wealthy, and is really just a tax on people who need to move home.”
Abolishing stamp duty would help sell more homes in London
A key message of the LSE report was that house selling could increase by 27% if SDLT were abolished. At present, many families are feeling discouraged from selling houses to buy more suitable homes because of the cost of stamp duty. The knock-on effect of this is to reduce housing stock, and limit mobility. For example, older people still living in the family houses where they raised their children are resisting downsizing because of the stamp duty. This means fewer three- and four-bedroom houses are available to growing families at the time when they need them.
Chancellor Philip Hammond, who didn’t introduce the rates but has the power to change them, is under pressure from his own party to reform SDLT in his Autumn Budget. Economists are noticing the negative impact on the housing market, and many feel that only the abolition of SDLT will give buyers and sellers the flexibility they need, and reduce the housing crisis.
Harry says, “Everyone at Henry Wiltshire is eagerly anticipating the Chancellor’s Autumn Budget. If there is a change to stamp duty, we could see a lot of movement in the London housing market – it might be a pretty busy time!”
Buy, sell and let property in Hayes
Harry and the team at Henry Wiltshire Hayes are experts in buying, selling and letting property in West London. Call the Hayes office today for a free valuation and to get your home on the market.