Looking beyond the end of the stamp duty holiday
With a little less than a month to go before the Stamp Duty Land Tax holiday comes to an end, there has been a lot of research and discussion about whether the Government’s temporary cut to stamp duty has caused a boom to the housing market or not.
There are those who criticise the initiative, arguing that the cut in stamp duty has simply cost the Government around £4.4b in tax. Their stance is that that those people who bought new houses during the period covered by the stamp duty holiday were probably looking to move anyway. The view is that while the stamp duty holiday might have encouraged them to speed the process up, the number of sales would have been the same even if the stamp duty had remained at its normal rate.
While this could be debated, what cannot be denied is that the Stamp Duty holiday has had a positive impact on the housing market, giving a needed boost to a sector which was heavily hit by the lockdown restrictions. A record number of housing transactions in June 2021 meant that most conveyancing firms were working at capacity to complete housing sales before the phasing out of the tax incentive began in July.
A healthy housing market also impacts positively on many ancillary services, from trades people to furniture stores, so the Stamp Duty holiday will have boosted these markets as well.
Whatever our views on property taxation might be, now that we are approaching the end of the stamp duty holiday, the question has to be “what comes next”?
What will the beginning of 2022 look like?
While it is impossible to say for certain what is coming our way, we are optimistic and predict that the housing market will revert to normality. It is likely that the large number of property sales over the summer may cause the remainder of the year to be more muted than is usual for the time of the year. We are however confident that come March, the historic seasonal trends will have returned, leading to the expected increased demand for the summer months.
How the effects of the pandemic continue to impact the return of workforces to the office will continue to play a part though, as people may continue to seek to move out of larger cities, being able to work remotely.
Whatever the next couple of months brings, we are always here to discuss your property needs.
Call 0800 071 5517 or contact us to speak to one of our friendly team today.