Do we really need the Stamp Duty Holiday?

Secretestateagent

I know, as an estate agent, I should keep my head down and just make hay while the sun shines but is the current reduced rates in SDLT really necessary? As I wade through the online enquiries and manage the relentlessly ringing phones I can't help but feel the stamp duty holiday is a step too far.

We have had three 3 years of pent up demand thanks to the uncertainty of Brexit. Remember Brexit that's forgotten but not resolved. Add to this that a prolonged period of being sat at home seems to have highlighted short comings for many with the solution being to move. There was every indication that the market had not just survived Lockdown but would flourish before the SDLT holiday.

I'm not an advocate of the "wait till furlough ends". The current demand is not being created by those who are on furlough. Those unfortunate enough to still be on the scheme will be waiting till October to see if they can jump on to the bandwagon, not get off. I was astounded to see in the height of Lockdown that the economy only dropped by 20%. This means that all our running around doing our day jobs, all those High Street shops and restaurants only adds up to 20% of the economy. The vast majority of the economy just churns on regardless of our day to day input and is clearly pretty resilient.

Of far more concern to me is what happens after March 31st when the SDLT holiday ends. How many house purchases are we anticipating from then till the end of the year? Any lag in effects from the Lockdown will be fully exposed by then. Despite a booming house market many lenders already appear cautious. What is their lending criteria going to look like by then. I'm unfortunately old enough to remember the boom created by the joint tax relief in August 1988 and the subsequent crash it caused. While I long to be wrong this has a similar feel to it. I can't help but think that meddling with a market rarely works out well.

theartfullodger

Of course we don't.  It's just a sop to the property owning classes: Encourages them to vote for Bozo Benito the clown

eidand

Yes, we need the Stamp Duty Holiday

it's saving me a lot of money, so I am happy!

Secretestateagent

eidand said:

it's saving me a lot of money, so I am happy!

That's great news

seradane

Yes, we need the Stamp Duty Holiday

Is the market buoyant because of the SD holiday or in spite of it? I don't think anyone can say for sure.

My (entirely unscientific) thoughts are that part of the reason the market is so buoyant is due to the Stamp Duty holiday. It's taken a bunch of households who were slightly unhappy where they were and on the fence about moving, and pushed them to make the move now to take advantage of the scheme.

The attitude of 'Oh the market is booming now, that measure wasn't needed' is the same sort of logic that gets us 'Oh we don't need IT staff, our computers are all running just fine'... sometimes when something is working as intended, it doesn't actually look like it's doing anything at all.

I don't disagree with you about the risks when the scheme ends however. But if you think the market is booming regardless of the SD holiday, then surely those reasons will still be there next year?

eidand

Yes, we need the Stamp Duty Holiday

seradane said:

Is the market buoyant because of the SD holiday or in spite of it? I don't think anyone can say for sure.

My (entirely unscientific) thoughts are that part of the reason the market is so buoyant is due to the Stamp Duty holiday. It's taken a bunch of households who were slightly unhappy where they were and on the fence about moving, and pushed them to make the move now to take advantage of the scheme.

The attitude of 'Oh the market is booming now, that measure wasn't needed' is the same sort of logic that gets us 'Oh we don't need IT staff, our computers are all running just fine'... sometimes when something is working as intended, it doesn't actually look like it's doing anything at all.

I don't disagree with you about the risks when the scheme ends however. But if you think the market is booming regardless of the SD holiday, then surely those reasons will still be there next year?

i think it's buoyant because of it, tbh, but of course it's hard to say that's the actual reason. People do need a place to live so this might have happened without it as well.

AdrianC

Whether it's necessary or not is a question for one man, and one man only. And his name is Rishi Sunak.

All you, as an EA, need to know is that it exists.

ProDave

My guess is the market is buoyant because people want to take the oportinity to save a few £000.  So anyone thinking of buying or moving in the near future will want to do it now.

By the time the SD holiday ends, anyone that has wanted to buy or move will have done so and there will be few buyers.  Who will want to buy and pay several £000 more than they had to last week.

Look forward to the 2021 house price crash?  Just like the late 1980;s crash following the boom to beat the ending of double MIRAS.

I wish the government would not meddle in the housing market. it seldom ends well.

Angela_D_3

It's helped me I don't mind telling you.  I was beign backed into a corner of having to buy the FMH to save the £8,000 stamp duty where as now I can relocate and buy a house I actually want without a concessionary expensive mortgage, therefore will have more money to spend in the local economy for the next 5 years at least.

HCIMbtw

No, the Stamp Duty Holiday is Unnecessary

i was moving anyway.. not needed imo, just markets the market more mental than it always has been

blue_max_3

I think rather like the eat out scheme, the restaurants will be forced to continue it out of their own pockets. And likewise, the sellers will end up paying for it when the scheme finishes. Just deduct the stamp duty off the price straight away. All this does is postpone the pain, like the furlough scheme which wasted billions.