Stamp Duty Cut: Working already?
It didn’t take too long for different opinions to form on the Government’s decision to remove stamp duty for first-time buyers who were purchasing property priced at less than £300,000. The Government introduced the measure during the November of 2017 Budget and they believed it was a method that would help first-time buyers get on to the property ladder. However, within minutes of the announcement, the Office for Budget Responsibility suggested that this change would lead to an increase in property prices.
These opposite opinions mean that people are keen to see what the full impact of the stamp duty cut will be. You may question whether it is too early to examine the market for changes, but such is the level of interest in the property market, there are organisations and companies making statements on stamp duty cuts.
Some organisations believe stamp duty cuts are already working
Countrywide are a prominent estate agent in the UK and they said that they experienced a 10% increase in walk-ins from first-time buyers. It is positive that there appears to be more interest from first-time buyers, but interest doesn’t necessarily equate to purchases, so not too many people will get carried away with this announcement. However, it has been enough for the Chancellor of the Exchequer to state that the stamp duty cut has helped first-time buyers.
Not everyone is as positive about stamp duty cuts
Mind you, not everyone is willing to agree on this matter. The Royal Institution for Chartered Surveyors, or RICS, asked surveyors if they had noticed any difference. At the end of 2017, 86% of respondents said that they had failed to experience any additional interest from first-time buyers. These respondents were also asked if they believed the stamp-duty cut would have an impact on the market and 66% of surveyors said they didn’t believe that it would. By contrast, 12% of surveyors stated they believed that the stamp duty cut would lead to an increase in interest, and purchases, from first-time buyers.
There will also need to be studied undertaken to see if the stamp duty cut has led to property prices rising. The unfortunate thing with this though is that there are many reasons why property prices can rise, so it would be extremely difficult, if not impossible, to state for certain what impact the stamp duty cut has had on property prices.
At Liberty Gate, we appreciate that there are many challenges to stepping on to the property ladder and anything which helps people to buy a home has to be seen as a good thing. There is no denying that the removal of stamp duty was a bold move, but it remains to be seen if it will have a positive impact on the market or offer any additional service to the people it claims to be aiming to assist.
No matter what stage you are at in the property buying process, if you would like guidance from a local property market specialist, make sure you contact Liberty Gate and we will be more than happy to help.