Rishi Sunak's stamp duty changes welcomed by housing market as shares rise

6 July 2020

Housebuilders have welcomed reports the Chancellor is mooting the introduction of a stamp duty holiday.

Rishi Sunak has drawn up proposals to exempt most homebuyers from paying any stamp duty and will outline plans on Wednesday to lift the threshold at which people start paying stamp duty from £125,000 to as much as £500,000, according to The Times.

It could be in place for six months to boost demand. The sector was hurt by the Covid-19 lockdown, with people encouraged to avoid moving possible where possible. Those restrictions were eased in May when viewings were permitted again, and estate agents and show homes could reopen.

Shares in estate agent groups such as Foxtons and Purplebricks were all higher this morning, and shares in housebuilders Persimmon, Taylor Wimpey and Bellway also improved.

Bellway’s chief executive Jason Honeyman said: “Any help is positive but developers need longer term solutions to provide the confidence to invest.” He added: “Developments often take several years in the making so a 6 month fix is unlikely to have an effect on our investment plans.”

Antony Stark, a director at London builder Linea Homes, said the stamp duty change “would be welcomed and I would expect prospective buyers to jump on this opportunity creating a much needed spike at the more affordable end of the market”.

Patrick Franco, chief operating officer at Foxtons, said: “We welcome any measure, which can help Londoners buy a home. We would encourage the Government to set the threshold for stamp duty relief at up to £600k, which would then encompass 70% of London property sales, based on 2019 volumes.”

Tom Bill, head of UK residential research at Knight Frank, said: “A stamp duty holiday would provide welcome financial relief for millions of people, including first-time buyers. The government understands that moving house has far-reaching benefits for the UK economy and this may form part of a wider re-think of property taxation that recognises this strategically important role. However, it would need to be introduced immediately to prevent buyers from putting plans on hold and losing the momentum that has built since the market re-opened.”

You usually pay stamp duty land tax on increasing portions of the property price above £125,000 when you buy residential property.

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