The facts first. Reports of a stamp duty holiday for all home buyers appear to be wrong.
Instead, the Treasury is considering the “deferral” of stamp duty; just for first-time buyers. They would have to pay the money back in the future, a bit like a student loan.
So not necessarily a big vote-winner then.
More importantly, would a stamp duty freeze kickstart the property market? I doubt it. Sales have frozen because banks will no longer lend as much as a year ago; as simple as that.
So, a typical first time buyer purchasing an average home (£180,000) has a dilemma. Last year he could borrow, say, £150,000. Now he can only borrow, say, £110,000. Unless prices drop further, he has a £40,000 hole in his finances.
Not paying stamp duty on this purchase would save him - falling in the 1 per cent bracket – a mere £1,800.
It’s a token gesture; no more.
PS
As an afterthought – if anyone doubts me – take a look at almost any newbuild scheme in the UK. A year ago you could get a discount of 5 per cent. Now you can haggle 20 per cent off a new flat.
And still no one is buying.
PPS
We pointed out weeks ago that the stamp duty take is already set to plunge this year. Which is a separate headache for the Treasury. (The £10bn figure includes commercial property)


Jim Pickard
Kiran Stacey

