The Impact of the end of the Stamp Duty holiday
April 2nd, 2010
The end of the Stamp duty holiday had a dramatic effect on the housing market as the Council of Mortgage Lenders reported 49% fewer house purchase mortgages were granted in January than in December. However the 32,000 loans granted was still an increase on the 23,000 for the same time last year. The biggest drop was in first time buyers where the number of loans dropped by 54% compared to the number of mortgages granted in December.
The end of the Stamp Duty Holiday saw an increase of 49% in mortgages granted in December followed by a 71% drop in January.
The Director General of the CML Michael Coogan said, “When the December and January data are taken together, they show little change in the underlying market conditions compared with recent months, with activity still slow but well up on the lows of a year earlier.”
Happy Investing!
The End of the Stamp Duty Holiday
November 24th, 2009
The Daily Telegraph recently carried an article in which it stated that a coalition of 7 property groups, led by the National Association of Estate Agents and the Association of Residential Letting Agents were calling on the government to reform stamp duty as they claim it is distorting the housing market.
This follows the Royal Institution of Chartered Surveyors (RICS) report that stated the end of the stamp duty exemption on properties costing up to £175,000 could have a detrimental effect on the recovery in areas that were lagging behind the rest of the country. Surveyors in the West Midlands, the East Midlands, Wales and Scotland are expecting a drop in activity when the 1% threshold reverts back to properties sold over £125,000. The slump in sales will be mainly in the first time buyer market, which will have a favourable impact on the buy-to-let market as the young upwardly mobile now choose to rent rather than find a large deposit and stamp duty.
Surveyors in London and the South East have said the end of the stamp duty holiday will not impact on the market as the average house price in those areas are well above the £175,000 threshold, and in the North of England, where the average house price is £116,051 were also less concerned about the impact of the concession would have on activity.
Last week the Council of Mortgage Lenders calculated that 132,500 house purchases, funded with a mortgage had escaped stamp duty in the past year.
Simon Rubinsohn, chief economist at RICS. Has been quoted as saying “ At the time of its introduction, we did question how great an impact this policy would have and judging by the fact that only surveyors in certain parts of the country are particularly concerned about the ending of the holiday, it could be said that some areas of the UK hardly even noticed the change, however the additional transaction cost is still a worry to many, particularly first time buyers, and it is a threat to the market in areas of the country that are still seeing a weak price environment”.
Happy investing.