The vast majority of agents have strongly welcomed the revised stamp duty regime as an early Christmas present to revitalise the housing market. The regime came into force from midnight.
For those who missed the announcement from Chancellor George Osborne, the new SDLT regime effectively cuts stamp duty for 98 per cent of homebuyers across the UK.
It drops the badly-designed and widely-discredited ‘slab’ tax and instead introduces a graduated rate working in a similar way to income tax.
From £0 to £125,000 the rate is zero per cent;
From £125,001 to £250,000 the rate is two per cent;
From £250,001 to £925,000 the rate is five per cent;
From £925,001 to £1.5m the rate is 10 per cent;
Above £1.5m the rate is 12 per cent.
The move achieves a number of Conservative goals. Firstly, it spikes the guns of those in favour of Labour’s mansion tax, by clearly discriminating against the rich – a bitter pill for some to swallow, coming from a Conservative-led government.
Secondly, it makes the new stamp duty very ‘smoothly’ graduated and much lower for most first time buyers, which were goals of the estate agency industry which had extensively lobbied the Chancellor ahead of his Autumn Statement.
Thirdly it appears ‘fair’, at first sight at least, exerting the highest demand on those most able to pay.
Agents and organisations in the market welcomed the move with open arms.
“Top marks for the Chancellor” says Paul Smith, chief executive of Haart. Osborne has “paid heed to the property industry’s long-held concerns over the punitive stamp duty” he says.
The National Association of Estate Agents was also pleased. “These measures will help the majority of buyers” according to Mark Hayward, managing director of the association.
Zoopla took the line that the new duty regime would mean sellers would no longer have to artificially price up or down their homes to avoid so-called ‘dead zones’ – those price areas close to the old stamp duty thresholds where sellers found buyers particularly resistant to pay.
In May this year, for example, Zoopla estimates some 2,635 properties had been artificially under-priced to make them more appealing to buyers. With the new stamp duty regime in place, the sellers would have been able to ask more appropriate prices – adding some £213m to the overall value of the properties in question, the portal claims.
Sellers in future “won’t be forced to discount their properties to sneak under certain bands” according to the portal’s spokesman Lawrence Hall.
Hunters – the franchise giant led by Kevin Hollinrake, who just happens to be a prospective parliamentary candidate for the Conservative party – appeared more ecstatic than most firms about the (Conservative) Chancellor’s reform. “This is great news” says Hollinrake who also just happened to describe the move as “good for the housing market and the economy as a whole.”