Stamp duty holidays are “rarely effective” and result in an increase in property prices, Andrew Goodwin, chief UK economist at Oxford Economics has said.
In the research firm’s weekly newsletter, Goodwin said: “We are sceptical this will deliver much additional housing market activity, with much of the tax cut likely to be capitalised into the value of the housing stock, pushing up prices.”
This week, chancellor Rishi Sunak announced the stamp duty threshold would be increased from £125,000 to £500,000 until March next year. This is expected to create an average saving of £4,500 for buyers and see nine out of ten forgo the tax completely.
The bulletin referred to Oxford Economic’s research in 2017, which followed the then-chancellor Philip Hammond’s move to provide relief for first-time buyers on property purchases up to £300,000. This concluded that as the burden of a tax holiday would fall on the seller, house prices would be pushed up by an average of 0.4 per cent.
As for other measures announced in this week’s Summer Statement, Goodwin said there were “major question marks” over the effectiveness of them and said it was hard to see how it would have a “material impact” on the growth outlook.
Other initiatives included a Job Retention Bonus and £5,000 voucher for homeowners to make environmentally friendly renovations to their home.
Shekina is the deputy editor at Mortgage Solutions and commercial editor at Mortgage Solutions and Specialist Lending Solutions. She has nearly eight years of experience in the B2B publishing market, having previously covered the hospitality, retail, pet, accounting and jewellery sectors.
Shekina has worked for Mortgage Solutions and Specialist Lending Solutions for almost five years. Here, she covers the market’s breaking news stories, engages with professionals in the sector, and oversees any commercially agreed content in partnership with mortgage-related companies.
This includes presenting webinars and hosting roundtable discussions on developing themes in the mortgage sector.
She is an NCTJ-trained journalist and was nominated for the Headline Money Awards Mortgage Journalist of the Year in 2021.
In her spare time, Shekina likes to read, travel, listen to music and socialise with friends.
She currently reports on current events in the mortgage market and liaises with financial clients to produce sponsored content.
Follow her on Twitter at @ShekinaMS