08th July 2020
Stamp Duty holiday is flawed history repeating itself - Walker Crips Property Income Ltd comments
Commenting on UK Chancellor Rishi Sunak’s introduction of a Stamp Duty ‘holiday’ to fend off a UK housing market crash, James Allen, Director of Walker Crips Property Income Ltd, warns history is repeating itself and greater volatility is risked in the long term:
“Unfortunately, the Chancellor has not learnt the lessons from a recent Tory incumbent in his post. When former Chancellor Osborne touted his change to Stamp Duty, there were concerns from the market about a spike in transaction completions before the rises came into effect, followed by a dramatic slowdown with tax takings falling in relative terms. All of these things subsequently happened.
“We now have a new policy that looks like history repeating itself. The Stamp Duty ‘holiday’ is likely to increase transactions in the sub-£500,000 market, adding liquidity and volatility into an already liquid part of the market. Tax take will obviously fall and, at the end of the holiday, transactions are likely to slow significantly again, risking price volatility at a time when the market is craving stability.
“In order to achieve the Chancellor’s aim of protecting the housing market, the most obvious route would be to simply reverse the counterproductive changes introduced by Chancellor Osborne. We know what effect they had when introduced, so we can say with high conviction what effects their reversal could hold.”