The Government’s decision to cut stamp duty could help boost new housing delivery by 16% across England, research by Alliance Fund suggests.
Removing the initial stamp duty land tax (SDLT) threshold was just one of the many announcements that came late last week as part Chancellor Kwasi Kwarteng’s ‘mini-Budget’, esearch by Alliance Fund suggests
As a result, SDLT will now only be payable on property purchases above £250,000, while first-time buyers will only pay the tax on purchases above £425,000.
This stands to save the average homebuyer as much as £2,500 and the average first-time buyer up to £8,750.
Iain Crawford, chief executive officer of Alliance Fund, said: “A stamp duty cut is great news for homebuyers […] there’s a good chance we may also see a boost to the number of new homes reaching the market.
“The boost that a stamp duty cut will bring to overall market sentiment […] is very much a wave worth riding for those delivering new-build stock to the market.”
Alliance Fund analysed the level of new-build completions seen following the implementation of the original stamp duty holiday, comparing the level of housing delivery over these five quarters to the previous five.
The figures show that between Q3 2020 and Q3 2021 a total of 220,530 new homes were completed across England.
The London property market benefitted to the greatest extent, seeing a 23% boost in new-build completions.
The East Midlands also saw a notable increase, with the level of new homes reaching the market climbing by 20%, as did the North West and North East (+18%).
In fact, every region of England saw a boost to new-build stock levels following the previous reductions and while this increase was at its lowest in Yorkshire and the Humber, there was still an 11% increase in new home completions.
Crawford continued: “We’ve already seen how the stamp duty holiday helped the market bounce back during the pandemic, thanks to a heightened level of buyer numbers with budgets buoyed by a tax saving.
“This also spurred an uplift in the number of new-build completions by developers keen to capitalise on such positive market conditions and so we can expect the latest cuts to have a similar influence for both homebuyers and housebuilders alike.”
