Chancellor banks on stamp duty cut and other measures to revive flagging housing market03/08/2020
One major victim of the coronavirus crisis is the UK housing market, which has seen its vigour reduced dramatically in recent months. Luckily, Chancellor of the Exchequer, Rishi Sunak, has a treatment plan in mind, which he laid out in his Summer Economic Update. The centrepiece of this plan is a temporary cut in the rate of Stamp Duty Land Tax (SDLT), which the government hopes will boost confidence amongst house-buyers.
In May, property transactions fell by an incredible 50%. House prices have also fallen for the first time in eight years. The Chancellor’s cut will see the nil-rate band of residential SDLT (that is, the band of house prices that pay no stamp duty) increase from £125,000 to £500,000 – a substantial difference. This exception of SDLT for property sales up to £500,000 took effect on 8th July 2020, and will continue until 31st March next year.
Mr. Sunak also announced a slew of other measures to help the property market. They include a £2 billion Green Homes Grant, which will provide at least £2 for every £1 that homeowners and landlords use to make their buildings more energy efficient, up to £5,000 per household. The government intends to upgrade around 600,000 British homes in this way, stimulating the economy and furthering the UK’s journey towards carbon neutrality.
The Chancellor’s announcement has been met with praise by commentators. Eric Leenders, Managing Director of Personal Finance at UK Finance, was one such commentator. He told reporters:
“The Chancellor’s announcement on stamp duty should give a welcome boost to the housing market and in turn have positive knock-on effects for the wider economy. This measure designed to re-boot the housing market builds on the wide package of support put in place by mortgage lenders, working with the regulator and HM Treasury, to help customers through these tough times.
“The industry has a clear plan to help homeowners whatever their financial situation and is committed to providing ongoing support to those customers who need it.”
If you want to know how you can make the most of the SDLT cut, or have questions about anything else featured in the Chancellor’s Summer Economic Update, give JW Hinks a call on 0121 456 0190.