It’s time to review ‘outdated levels at which people start paying stamp duty’
Marc da Silva

Now is the time to review the banded rates of stamp duty to ensure that the levy is fair and works for the many and not the few, according to Propertymark.

The tax holiday on stamp duty rates was introduced in July 2020 but ends in England and Northern Ireland today.

The initial holiday meant home buyers did not have to pay stamp duty on the first £500,000 of purchase, falling to the first £250,000 from 1 July.

However, the nil-payment threshold will return to the pre-Covid level of £125,000 from tomorrow.

Market demand, sales and average prices have all risen since last July, with the holiday giving the sector a shot in the arm.

Analysis from Propertymark’s Housing Market Reports have found market demand has been boosted since the stamp duty holiday was introduced.

Figures show the average number of buyers per branch a month rose by more than 100 between July 2020-August 2021 during the holiday.

There was an average of 445 buyers per branch during that time, which is higher than the average of 340 between April 2019 and June 2020 in the 14-months before the stamp duty holiday.

Sales agreed per branch also shot up 41% to an average of 11.3 a month during the stamp duty holiday between July 2020-August 2021, higher than the eight in the 14-months prior.

And fewer homes sold for below the asking price and more above during the stamp duty holiday, showing the sector turned from a buyers’ market to a sellers’ market.

Between July 2020-August 2021 when the holiday was introduced, 45% of monthly agreed sales were less than the asking price, as opposed to 80% in the 14 months prior.

More instead sold above the asking price – an average of 19% during the stamp duty holiday as opposed to just 4% in the months before it was introduced. At its peak, 40% of property sales agreed were above the asking price in June 2021.

Mark Hayward, chief policy advisor at Propertymark, said: “When we campaigned for the introduction of a temporary Stamp Duty Land Tax holiday, we hoped it would help increase confidence and consumer spending in the housing market and play a crucial role in restarting our economy.

“It has done just that and has been a great success, creating a healthy and flowing market which has encouraged more people to buy and sell – as evidenced by our own Housing Market Reports which have seen an increase in the average number of buyers and sales agreed.

“With the holiday at an end, it is now timely to review the outdated levels at which people start paying stamp duty to reflect market demand, average house price and wage growth, given the basic, pre-Covid rates have not changed since 2014.”

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