Under current rules, put in place in September, home buyers do not pay the tax on the first £250,000 of a property’s price. This increased to £425,000 for first-time buyers, who also get discounts on properties up to £625,000.
However, in his Autumn Statement yesterday the Chancellor said the government would ‘sunset’ stamp duty cuts on 31 March 2025. This has raised concerns there will be more pressure on people to move and this will place them in more a more financially vulnerable position.
Richard Campo, founder of broker firm, Rose Capital Partners, said: “Putting a deadline on the Stamp Duty changes is a really bad idea.
“The only good thing that came of the infamous mini-Budget was that the stamp duty allowance wasn’t time limited.
“What always happens when you create a deadline? It creates a rush to hit the deadline which pushes up prices artificially, and also, what comes next? Going back to the current scheme or not? That wasn’t mentioned so the devil will be in the detail here.”
Others were a little more positive, Sarah Coles, senior personal finance analyst at Hargreaves Lansdown, thought it might provide a ‘short-term boost’ for the market.
“By moving from an open-ended stamp duty cut to a limited opportunity, it could hurry through more sales, and help to keep the market ticking over until March 2025,” she said.
She added: “But this may not be the best outcome for buyers. Right now, the market is sending out every possible signal that they might want to hang fire, because we could be reaching the peak, but the desire to save tax could force them to buy sooner than they otherwise would, and expose them to the risk of property price drops.
“Meanwhile, if they decide to hold on for the bottom, they could end up rushing for the end of the stamp duty break along with so many others that they end up paying over the odds.”
Stamp duty cut extension a ‘lifeline’
There were others, however, who welcomed the fact the Chancellor had extended the stamp duty break for two further years.
Charlotte Nixon, mortgage expert at Quilter, said: “The housing market should see the stamp duty cut remaining as a lifeline that will prop up demand during what could be a torrid year for the housing market.”
She added: “Hunt signalled that while the housing market gets back on its feet over the next two years the cut will remain in place which will hopefully bring some much-needed demand to a market starting creak under the pressure of the cost-of-living crisis.”
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