Property News > Market Activity Stifled by Stamp Duty

Market Activity Stifled by Stamp Duty

The government’s recent White Paper offered some hope that the housing market crisis may be addressed sooner rather than later but it has been somewhat counterproductive as it failed to address the problem of the heightened Stamp Duty. First time buyers, in particular, are set to be affected by the increased Stamp Duty which is a tax paid when buying a property – Chancellor Philip Hammond failed to take on board the concerns regarding the current level of Stamp Duty which was raised last year. Concerns have also been raised regarding the impact of increased Stamp Duty at the higher end of the market and it has been cited as having a direct effect on the London property market – especially the prime areas which have seen price growth stall and rental pricing stutter. Hammond refused to be drawn on the subject at the Spring budget and did not mention Stamp Duty during his speech. This lack of understanding from the Chancellor shows a clear level of ignorance across the property market as the Stamp Duty hike has affected every level of the market with plenty of evidence to support the supposition. Though the volume of transactions recorded in the UK has remained stable; it is clear that the figures would be much higher at the previous rate of Stamp Duty and exponentially higher had their been a relaxation, even temporarily. The failure to address the Stamp Duty issue has had an adverse affect, not only on the property market, but on the government’s tax collection ability as less action in the market means less tax funds being paid to the Treasury. All areas of the market, including the build to rent and buy to let, have been damaged by the Stamp Duty issue and the problem will spiral out of control before long and could even impact on the nation’s employment figures. Those in skilled labour and architecture could be the first to suffer as new developments are being put on hold for fear of further market stagnation. The lack of care for the market on the whole is staggering but the direct impact Stamp Duty has on first time buyers is where the property market is struggling the most. Without the first time buyers, there can only ever be a set number of those with the financial ability to purchase property – a number which is also steadily dwindling. The Stamp Duty tax is currently being labelled as a hindrance on free movement within London and outside of the capital which has led to an economic downturn for the property sector. The longer the issue goes on; the more damage that will be done to the market, to business and to the economy on the whole.

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