Stamp Duty Change Reactions
September 2nd, 2008 3 Comments » | POSTED BY ROB
The big story of the day is the 1-year change to stamp duty announced by the Government.
In a bid to stimulate some interest in the housing market, the lowest threshold for paying stamp duty has been raised from £125,000 to £175,000 until September next year.
For what it’s worth, I don’t believe it will have a great affect on the housing market. Sure, there will be some first-time buyers who will be overjoyed about saving their 1%, up to a maximum of £1,750, but they may still struggle to get a mortgage in the first place. Also, given that house prices have fallen over 10% in a year, it may well be best to sit it out and wait until prices stabilise, which could well be after the threshold returns to normal.
Although ministers predict that almost half of house transactions will now be exempt from stamp duty, most house purchases in the south of England will probably miss out, as the average house price down there, especially in London, are well above £175,000.
One of the funniest angles on this story is that Gordon Brown chose Ealing to announce the new measures – where the average house price is £329,000 – he would have been better off announcing it somewhere up north where it would have got a better reaction.
A similar measure to give a stamp duty holiday was taken by Norman Lamont back in 1991 with limited results.
Naturally, there’s plenty more coverage of the stamp duty changes elsewhere on the web:
- Stamp duty axed below £175,000
- Housing changes, the reaction
- Chancellor raises stamp duty threshold to £175,000
- Gordon Brown’s stamp duty rescue plan dismissed as ’symbolic’ gesture
- Stamp Duty: Not enough to stop the rot
- Halifax welcomes stamp duty initiative
- Will stamp duty changes help revive the property market?
Of course, the stamp duty change is just one of a few measure announced today, but it’s likely to get the headlines.
In fact, it is the other measures which will probably make the most difference. Unfortunately, the details on the HomeBuy Direct scheme are pretty thin at the moment, and it too might prove to be a bit of a gimmick, aimed at flogging off all of those fancy new flats and houses that the homebuilders have thrown up and which are now threatening to help them go bust.
What are your thoughts about the measures introduced by the Government? What effect do you think they’ll have, if any? Leave your thoughts in the comments below.
photo credit: ClatieK
3 Comments on “Stamp Duty Change Reactions”
Economonkey, September 2nd, 2008
Property prices are still so wildly overinflated that they’re out of reach of most average earners (unless they’re willing/able to borrow dangerously beyond their limits) and I very much doubt that a 1% saving is going to make any real difference to many people, least of all the now extinct First Time Buyers.
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