The mortgage lending and broker community have reacted in various ways to the Stamp Duty change this week, with one trade body claiming government support is needed on other schemes.
Rishi Sunak’s announcement that buyers will pay no Stamp Duty on the first £500,000 of their purchase for the next nine months, derived largely positive responses as a much-needed measure to breathe life into the housing market.
While the Treasury said that nine out of 10 buyers will pay no Stamp Duty as a result of the holiday, the Association of Mortgage Intermediaries (AMI) said the support is required elsewhere
AMI chief executive Robert Sinclair said: “Whilst we are not disappointed, we believe the money could be better invested elsewhere. The problems we are seeing relate to what will happen as we run out of the existing Help to Buy scheme and into the replacement scheme. Therefore, if the government was going to invest, they should do into the help to buy schemes rather than a Stamp Duty holiday.”
Head of residential development research at Knight Frank, Oliver Knight, said: “The announcement will bring a welcome boost, however, a wider re-think of property taxed is still needed to reduce the distortive effect stamp duty has on property markets.”
Rightmove claimed that in the first half hour following the announcement, it saw traffic on its website jump by 22%. Of properties for sale on Rightmove, 81% are £500,000 or under.
Rightmove’s property expert, Miles Shipside, said: “Lockdown prevented 175,000 would-be sellers from coming to market, so we hope this holiday will provide the spur for those to come back. But what we could see now is people rushing to get a price agreed before some sellers put their prices up in the hope people will be able to pay more because of the tax savings.”
Posting on LinkedIn, Alex Beavis, head of mortgage products at Skipton Building Society, said the cut is an “incredibly welcome boost for homebuyers across all rungs of the property ladder”.
He explained that if this change does as the government intends, it should have a positive impact on maintaining house prices, though he warned that it shouldn’t give rise to “opportunistic price hikes”.
Stuart Miller, Newcastle Building Society customer director, said: “This is fantastic news for the north east in particular, it means that almost 100% of first-time buyers will be able to avoid paying Stamp Duty based on average property prices across the region.”
The Stamp Duty announcement was welcomed in the context of mortgage approvals hitting a record low. Bank of England data revealed that in May, the mortgage approvals rating was down 90% on February’s levels.
Lender trade bodies are probably thankful for any measure, for the moment. UK Finance’s managing director of personal finance, Eric Leenders, said: “The announcement should give a welcome boost to the housing market and in turn have positive knock-on effects for the wider economy.”