The chancellor’s announcement of a stamp duty holiday gives a welcome boost to the west country property market and, in turn, will undoubtedly have a positive knock-on effect for the wider local economy.
The stamp duty saving will not only be welcomed by home buyers but will also have a positive impact on a long list of related industries, such as house builders, conveyancers, estate agents, finance and insurance providers, removal companies, furniture, white goods and garden retailers together with high cost items and services including cars and holidays – the knock-on effect is enormous!
Welcome as it is , there are winners and losers and a more expansive and longer term view may have been even more beneficial to help build a firm foundation for the post covid-19 economy.
The winners are clear – If you are buying a property for £350,000 you are going to save £7,500 of your hard-earned cash (which could mean a new kitchen or even an increased deposit to enable you to secure that new home that might have been just out of reach) but you have to feel sorry for those who completed their purchases prior to this announcement, many of whom will understandably feel aggrieved, or at least somewhat disappointed. They can only hope that a further announcement might reward their commitment to completing pre-lockdown purchases – we can only hope.
Unlike previous government intervention in the housing market (sadly, my time in estate agency pre-dates Nigel Lawson’s announcement of the abolition of dual tax relief on mortgages in the late 1980’s which fuelled a massive property bubble in the space of just six months) I believe that this announcement will have a stabilising effect on house prices..
The wider issue is the relatively short “window” the holiday offers – particularly giving house builders little opportunity to use the reduction to inform strategic decisions on construction plans beyond the next nine months.
What do the experts say?
Rightmove’s property expert Miles Shipside said: “This move will help to keep the nation and wider economy moving because keeping the current momentum going will help prevent destabilising falls in property prices as unemployment grows, and enable a quicker economic recovery.
“Lockdown prevented 175,000 would be sellers from coming to market so we hope this Stamp Duty holiday will provide the spur for those missing movers to come to market. They will find there’s currently record demand for their properties from prospective buyers, with Rightmove enquiries to agents now double what they were before lockdown.
“Home-movers will be grateful that the changes come into effect straight away so they don’t have to delay their plans, and what we could see now is people rushing to get a price agreed before some sellers put their prices up in the hope people will be able to pay more because of the tax savings.”
What are the latest housing market trends?
The first five weeks since the market in England reopened showed clear signs of pent-up demand being released. We saw numerous records broken in terms of people looking on our site and people contacting estate agents.
Supply has not increased at the same rate as demand, so this has pushed prices up by 1.9% compared with prices just before lockdown.
Click here for a full breakdown of what’s been happening to house prices in England.
We think (hope), there will be more announcement to come – Watch this space!