‘Government must view the property market through the eye of the home owner’
Price growth could remain stagnant if the Government fail to reform Stamp Duty.
This is according to agency Jackson Stops who forecast that if the tax remains at a ‘punitive’ level, and market uncertainty continues, house price growth could remain flat throughout 2018.
The agency also stated that in London, tenants are opting for newer properties in more desirable locations, meaning that older homes are being left vacant. In turn, this so-called ‘magpie market’ is causing rents to increase as landlords struggle to find tenants.
Commenting on the impact of Stamp Duty during the last financial year was Nick Leeming. The chairman of the agency stressed that the Government need to look at the market through the eyes of the consumer, stating: “Prohibitive levels of Stamp Duty have been a real drag on the UK property market over the past financial year, and although the Treasury will be pleased to see receipts have generated £8.6bn in revenue on residential transactions, sales levels fell by 8%.
“This fall in market activity can no longer be ignored and the Government must view the property market through the eye of the home owner – particularly now the Bank of England has announced an interest rate rise. Traditionally, higher interest rates mean higher mortgage rates, so if buyers weren’t already acutely aware of the costs associated with moving, they will be now.
“With the Budget just around the corner, the majority of our branches hope for, but do not expect, Philip Hammond to address Stamp Duty reform, particularly at the top end of the market. If Stamp Duty levels weren’t causing so much harm to the £1m-plus market nationally, I think we would see an increase in liquidity at all levels.”