Talk Of Stamp Duty Holiday Slowing Housing Market August 29th, 2008
Last month the Chancellor of the Exchequer, Alistair Darling, announced that he was considering a number of options to try and help the struggling housing and homeowner loan markets and that one particular avenue to assist potential buyers was a holiday from the payment of stamp duty.
Since this initial announcement, there has been no firm decision from the Government as to whether stamp duty will be abolished for a period or not and, according to the National Association of Estate Agents (NAEA), this indecision is starting to have a negative impact on property sales and loan completions, as potential buyers put off the decision to purchase until they know if they are going to save the additional cost of stamp duty.
In a recent survey of NAEA members, 98 per cent said that the Government’s indecision had caused further damage to the already low level of consumer confidence in the housing market, as many individuals are already concerned about falling house prices and the current difficulty in obtaining a mortgage.
Of those interviewed, 56 per cent of agents said that at least one completion had fallen through and almost one third reckoned they had lost more than two deals due to customers waiting for a decision on the potential tax saving.
Stamp duty is a tax which is levied on property purchase and is charged at a rate of either, one, three or four per cent of the property price, depending on value, on houses above £125,000. Someone buying a house for £260,000, for example, could potentially save £7,800 if stamp duty was lifted. No wonder people are waiting to see what happens.
Peter Bolton of the NAEA said “This just isn’t good enough. The housing market is in a very serious position and we need serious action. The figures show that it is agents and consumers who are bearing the brunt of this indecision and whilst we need a planned and managed response from the Government, we also need it quickly.”