With the Treasury considering cuts to stamp duty in the Autumn Statement, or at least before a General Election, experts are divided on the move, with some welcoming it, but many more ridiculing it as a pure vote-grabbing exercise that will provide more artificial support that the property market doesn’t need.
Graham Cox, founder of the Bristol-based broker, SEMH, was withering in his assessment of the proposal: “If there’s one thing you can rely on with this Government, it’s to implement exactly the wrong housing policy at exactly the wrong time. In thrall to the banks and house builders, they’ll stop at nothing to prevent house prices falling, despite all the economic and social damage high property values are causing. Idiotic doesn’t do it justice.”
Stephen Perkins, managing director at Norwich-based Yellow Brick Mortgages, was equally scathing: “A stamp duty cut or holiday would not be surprising from a Government that is clearly lacking in initiative and ideas. Reducing stamp duty artificially props up the market by bringing forward some transactions and inflating house prices, which are already out of reach of many despite recent falls. To top it all off, the end of stamp duty holidays is a cliff-edge where the market goes into cardiac arrest. So please, let’s not go there again.”
Riz Malik, director at Southend-on-Sea-based broker, R3 Mortgages, was laconic and ironic in equal measure: “If in doubt, go for a stamp duty cut. Round of applause, please.”
Craig Fish, director at London-based broker, Lodestone Mortgages & Protection, was also sceptical: “Cutting stamp duty is completely the wrong policy. The housing market has been artificially inflated for too long, and it’s now time for it to find its natural level, which will eventually be to the benefit to all.”
Much the same conclusion was drawn by Peter Stamford, director at The Mortgage Uni, who, on TikTok, said a stamp duty cut would be “a short-term sugar rush for the property market, not the long-term solution we need.”
Rohit Kohli, director at The Mortgage Stop, also said cutting stamp duty was all about votes: “A stamp duty cut is just a short-term shot in the arm to try to get this beleaguered Government through the next General Election. This isn’t going to help in the long term and whilst it may spur some hesitant buyers to get on with their transactions, it’s not going to fix the fact that we need fundamental changes around how housing policy works in this country. Stamp duty cuts will likely see prices continue to rise and it will continue to become harder for first-time buyers to get onto the property ladder.”
Meanwhile, Gary Bush, director at the Potters Bar-based broker, MortgageShop.com, said: “Attempting to buy votes by further fiddling with Stamp Duty misses the point. What’s really needed is a total revamp in SDLT taxation to tax only the sellers and not the buyers. Why should the bottom end of the market be further penalised when finally getting their foot on the ladder? This is the real problem and the knock-on effect throughout the chain would assist upward transactions.”
Malcolm Davidson, director at Hull-based broker, UK Moneyman, agreed with Bush: “A reform of Stamp Duty would be better but a holiday would certainly unleash the pent-up demand in the market.”
Jamie Thompson, director at Manchester-based broker, Jamie Thompson Mortgages, said stamp duty holidays could result in a “feast and famine” property market: “While stamp duty cuts are attractive, the Chancellor risks creating an environment where home buyers are reliant on them, or become used to expecting stamp duty holidays. This will create a nation of people only willing to move during stamp duty relief times. and result in a feast and famine cycle in the housing market.”
But some experts welcomed the move. Rob Gill, managing director at London-based broker, Altura Mortgage Finance said: “With housing set to be a key battleground in the next General Election, a pre-emptive stamp duty cut seems inevitable. It would be a popular, impactful move that would boost the property market and the wider economy, so will surely be hard for the Chancellor to resist.”
Gary Boakes, director at Verve Financial, agreed with Gill that a stamp duty cut would boost the property market, but not as much as during Covid given current affordability models and higher mortgage rates: “With mortgage rates now slowly declining, stamp duty cuts may well give people who have been waiting for rates to drop even further the extra incentive to start looking again. However, with rates higher and lenders’ affordability much more difficult than previously, we shouldn’t expect this to have the same effect as it did during Covid, so the worry that this will push prices up again may be misplaced. Ultimately, any extra incentive to get people looking again is a positive step forward.”
Kirsty Wells, director at Blueprint Mortgages & Protection, added: “I think stamp duty cuts would inject some life back into the purchase market. Anything that brings down the cost of moving would help. When stamp duty was cut during Covid, it pushed lots of people to move as they felt they were getting more of a bargain even though at the time most properties were selling for above asking price. That’s the risk, namely that people save on one hand but then potentially pay a premium for the property they’re buying on the other.”
Gareth Davies, director at South Coast Mortgage Services, was worried about the impact of a stamp duty holiday on the conveyancing sector: “When the Government can think of nothing else, it seems that meddling with stamp duty is their go-to strategy. Yes, it will have a short-term benefit for some people, but the last stamp duty holiday caused no end of drama, artificial house price inflation and had most legal firms running so far behind it was untrue. Conveyancing collapsed under the volume of transactions and so I’m not a fan.”
