0:03 AM, 3rd May 2024, About 6 months ago 3
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Coventry Building Society is urging the government to reform Stamp Duty after a significant drop in property transactions – including buy to let purchases – during the first quarter of 2024.
HMRC figures show there were only 192,500 property transactions since January – the first time the number has dipped below 200,000 since the temporary Stamp Duty holiday in July 2020.
This is the lowest level seen since the second quarter of 2011.
Coventry’s head of mortgage relations, Jonathan Stinton, said: “The first part of the year tends to be quieter for property transactions, but this year has been an especially slow start.
“The number of people moving home was always expected to drop once the Stamp Duty holiday in 2020-21 was over, but the number has kept on dropping and now we’re back to 2011 levels.”
He added: “Making the right changes to Stamp Duty could oil the wheels of the market, but it needs to be a carefully considered reform aimed at building long term stability rather than a sudden sharp boost in numbers.
“Temporary holidays and simplistic cuts are mainly short-term fixes which don’t necessarily help buyers years down the line.
“The challenge is to get creative because the same old tinkering around the edges won’t stand the test of time.”
The lender’s research reveals that since records began in 2008, there have only been eight out of 64 quarters with residential property transactions being below 200,000.
Now there is growing speculation among finance experts that changes to Stamp Duty could be announced as part of the Autumn Statement.
It is believed the Chancellor Jeremy Hunt could increase the threshold for Stamp Duty so buyers will begin paying at £300,000 rather than £250,000.
Coventry BS has released statistics highlighting the increasing burden of Stamp Duty on homebuyers.
Its analysis of HMRC figures reveals a dramatic decrease in the proportion of transactions falling below the £250k threshold, dropping from 62.5% in Q1 2014 to just 25.5% in Q1 2024.
This means nearly half (47.2%) of property purchases now fall within the 5% Stamp Duty band, compared to just 28% a decade ago.
Consequently, the average Stamp Duty bill has risen by almost £3,000 to £9,038.
Even first-time buyers are not spared, with 21.3% still facing Stamp Duty payments.
Also, the number of additional property transactions – such as buy to let – has dropped significantly, potentially impacting rental property availability. Numbers dropped to 43,800 in the first quarter of 2024 – which is 19.1% lower than the average number of additional property transactions in each quarter since the second quarter of 2022.
Coventry says these statistics suggest the current Stamp Duty system is hindering market activity and disproportionately impacting both homeowners and the rental market.
Whiteskifreak Surrey
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Sign Up9:42 AM, 3rd May 2024, About 6 months ago
This government is failing everyone and destroying everything.
And Labour will be even worse!
Sell and emigrate asap.
Reluctant Landlord
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Sign Up14:01 PM, 3rd May 2024, About 6 months ago
Reply to the comment left by Whiteskifreak Surrey at 03/05/2024 - 09:42
I'm looking for a cave to haul up in!
Michael Booth
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Sign Up19:12 PM, 3rd May 2024, About 6 months ago
It seems to me that the government's have a death wish , taxation is obvious its a form of revenue collection and also a behavioural tool excess taxation causes adverse behaviour and reduction in tax take, it ain't rocket science or is it .