An estate agency has called for Stamp Duty to be cut in order to boost property market activity.
Due to the alleged barriers that the tax places on potential home movers, estate agency Jackson-Stop & Staff state that a reduction of at least a third could help to reset the market, particularly in areas such as central London.
Commenting from the agency was sales director, Toby Whittome. He highlighted the stifling effect that Stamp Duty is having on both demand and supply, particularly when paired with the current economic climate.
Focussing on prime London in particular, he drew attention to the extreme example of Kensington & Chelsea, stating that the current transaction level had fallen to a monthly 120. This is three times less that the 2014 peak.
“Potential buyers in central London used to approach us about their next home move, driven by factors like a growing family or need for a home with more bedrooms or a bigger garden.
“These are the ‘old reasons’ for moving, from before December 2014. Our purchaser registration numbers are up, but the fluidity of the market has diminished hugely.
“When buyers are looking at 20% transaction costs including stamp duty, solicitor’s fees and moving costs, the attitude becomes: ‘We’re better off staying where we are’.”
Also commenting on the potential impact of a Stamp Duty cut was Nick Leeming. The Chairman of the estate agency stated that the affect it would have on the higher end of the market is likely to filter through the market as a whole.
“I think we would see the health and fluidity at the lower to middle end of the Greater London market spread to the higher end too.
“One recommendation is a UK-wide reduction in Stamp Duty levels of around a third, which should boost the property market at all levels, particularly at the £1m-plus level.
“It is worth remembering that in central London typical family homes will likely be worth £1m or more and, with Stamp Duty levels preventing these homes entering the market, it means that families are unable to move up or down the property ladder when they need to.
“Aggregate prices remain stable against a backdrop of economic uncertainty and low transaction levels, demonstrating that demand is sufficient to keep prices supported.”
