Estate agent says Labour and Tory plans to cut stamp duty would have no lasting benefit
The main political parties’ policies on raising the stamp duty threshold will not result in a lasting boost to the housing market, research from agent Savills has claimed.
In the spring budget, chancellor Gordon Brown doubled the stamp duty threshold from £60,000 to £120,000 to help first-time buyers.
The Conservatives responded last week with a manifesto pledge to raise the stamp duty threshold to £250,000.
Savills calculates that the government’s budget move frees 34% of homes across the country from duty. But in its latest residential research bulletin, published this week, it argues that the higher threshold will be of little benefit to homebuyers in the high-priced South, and will not be enough to encourage more transactions in a housing market that is being slowed by lack of activity.
Savills also cast doubt on the Conservatives’ planned £250,000 threshold, which would mean that 80% of sales would be free of duty. Richard Donnell, head of residential research, said: “It would benefit a significant number of homeowners across the country, but the impact on the market would be shortlived.”
The Conservatives’ manifesto pledge provoked strong reaction from pressure groups.
Adam Sampson, director of homelessness charity Shelter, said: “By increasing the stamp duty threshold, the Conservatives are raiding the public purse to promote private home ownership rather than using the money to increase the supply of affordable housing.”
Jim Buckle, managing director of online property search company Propertyfinder.com called it “a crude solution”. He added: “Although it would go some way to addressing homebuyers’ concerns, it does risk fuelling house prices artificially.”
Savills believes the housing market is stabilising, and has revised its forecasts for house price growth upward to 2.6% this year and –1% in 2006. The strongest growth is from the bottom 30% by value.
- Other, Size 0 kb