So, the stamp duty holiday for first-time buyers will happen. On homes up to £175,000. And for one year only.
The figure of £615m sounds reasonably generous…until you consider that the housing market is worth over £5 trillion.
Then again, is it based on the Treasury’s old forecasts for housing transactions or more realistic ones?
Last year’s stamp duty take was £14.3bn. Of that about a third was on commercial property deals and stock market transactions. Residential deals accounted for £10.1bn.
The Lib Dems have already forecast that this figure will slump to £5bn this year, not only because prices are falling but because the number of housing market deals has halved.
So is the Treasury’s £615m estimate based on a healthy market or a sick one? If the former, it may prove less generous than it looks.
UPDATE
Just spoken to the Treasury. They say the figure is based on current market assumptions rather than those made at Budget time. The new question is: Where will the cash come from?
Jim Pickard
Kiran Stacey
