George Osborne’s review of Stamp Duty Tax will have come as welcome news to the 98% of those due to benefit with the abolition of the slab system. But there is still speculation as to how much it will help rejuvenate a slowing property market across the UK as house price growth declined for a six month on the trot.
eMoov.co.uk will shortly release its latest property HotSpot data which found that nationwide demand for property has dropped 8% in the last year and by 28% in the capital. The RICS has predicted that the reform in Stamp Duty will result in a boost of 2.5% in property sales helping to bring the market back up to speed.
This said it is yet unclear as to how much these changes will sway vendors into considering the sale of their property, particularly in London where most properties cost over and above the threshold of which the new Stamp Duty reforms become detrimental rather than beneficial. Add to this the looming general election and the possible introduction of mansion tax and it could take a little longer for the UK property market to get moving again, more so in London than anywhere else.
Property expert, founder and CEO of eMoov, Russell Quirk commented “I agree that the SDLT measures announced last week will provide a boost in demand. When the average buyer is set to save £4000 as such, it’s bound to be a shot in the arm for the market and will, to an extent, re-balance the decline that agents are seeing in buyers registering as a consequence of a softening appetite, particularly in London.
Our latest Property HotSpot index shows a decline of 8% in demand since the beginning of the year across the UK, but a whopping 28% in London and conversely, it’s hard to see that this dilution in buyer activity will re-energise the capital especially as the SDLT reforms will financially benefit fewer people there given that the Chancellor has aimed his electioneering tactic at middle England as opposed to the Notting Hill set, seemingly. (The threshold for benefit vs detriment is £932,000).
Additionally, I suspect it’s only London buyers that are waiting for the outcome of the general election, particularly those with £2m or more to spend. The threat of a Labour led Mansion Tax, over and above George Osborne’s own version as unveiled in the Autumn Statement, is the biggest kick in the face for the London market since the Supertax of the 1970’s. No wonder the PCL hoi poloi are choking on their Foi Gras at the current lack of activity.”