Following the announcement of the Kwasi Kwarteng mini budget earlier today and the inclusion of a reduction in stamp duty, homebuilders and property have reacted to the news and analyzed the impact this could have.
Lynda Clark, CEO of First Time Buyer Group, said: “It is time for the government to take up housing as a subject of address. We’re less than a month away from the end of purchase assistance, but we’ve yet to see an alternative low deposit system with the same level of punch, although shared ownership is an invaluable option. for many.
“Affordability remains a concern for the next generation of homeowners, with average house prices now above the current stamp duty threshold for first-time buyers. The government’s plans to ease this payment are a proven formula that will help make move people again and could save home buyers thousands during the most devastating cost of living crisis in a decade.
“Liz Truss is all about trickle-down economics, and of course if home ownership remains affordable for everyone, then more first-time buyers will inevitably be able to jump onto the bottom rung of the ladder. Stamp duty reduction could help bring home ownership back within reach of many, while shared ownership, the First Homes program and deposit unlocking offer further assistance.
Stewart Lynes, General Manager of Miller Homes, commented: “We welcome the Chancellor’s changes to stamp duty today, the increase in the threshold particularly for first time buyers to £425,000 is significant and I’m sure it will benefit many people across the world. in England seeking to access the property ladder.
“The strategy put in place is a real boost for buyers and particularly first-time buyers and demonstrates the government’s vision of unlocking home ownership for a new generation.
Kamal Pankhania, CEO of leading property developers, The Westcombe Group, said: “We welcome today’s announcement that the government will reduce the rate of stamp duty by raising the thresholds at which people have to pay. Stamp duty disproportionately affects the average home buyer, and it is a welcome step that will help boost the housing sector, making it easier for first-time buyers to access the housing ladder and, more importantly, encouraging building more homes that are so badly needed across the UK.
“The Chancellor has inherited a decades-old challenge and I urge him to go further with reforms. For example, exempting first-time buyers from paying the tax in full would help support young people who so often have to struggling to buy their first home Similarly, continuing to raise the threshold at which stamp duty kicks in based on the average increase in house prices will help ensure that more people can be exempted These are the bold steps needed if we are to meet this challenge.
Joe Garner, managing director of London-based property developer NewPlace, commented: “Introducing a reduction in stamp duty five weeks before the deadline for purchase assistance loans will likely lead to a massive increase in last minute transactions, followed by a huge drop after the end of the deadline. limit. It is an irresponsible and populist policy that will likely see property prices rise further and decouple even further from income. This will likely be the final boost at the pump that will see the house price bubble burst, leaving first-time and recent buyers in negative equity, while speculators rush for below-market opportunities. .
Santhosh Gowda, President of Strawberry Star, said: “The stamp duty reduction provides a welcome boost to the housing sector, particularly in light of the end of homebuyer assistance, which will hopefully support economic growth and bolster consumer confidence. This will encourage more people to move, including downsizing, which will free up family homes and allow first-time buyers to move up the ladder. This will be a major boost for the sector which faces falling house prices amid rising inflation and rising interest rates.
“By stimulating growth in the residential sector, this will have a ripple effect on the broader real estate sector and the economy in general.”
“However, it is not a panacea. This does not change the fact that demand always exceeds supply and it is possible that house prices will prove increasingly volatile. Moreover, it does not solve the most fundamental problem at the heart of the market, namely the housing shortage. »
Edward Heaton, Founding Partner and Director of Buying Agents, Heaton and Partners, commented: “I have mixed feelings about the stamp duty reduction as our business stands to benefit from these measures which will help fuel demand in an already very competitive market, particularly outside of London.”
“The extensions to the zero rate band will be welcomed by first-time buyers and for those acquiring lower value properties in particular, but I can’t help but think the outcome will simply be to support demand as we we are heading into a recession. This can also fuel inflation and ultimately make entry into the housing market increasingly unaffordable for first-time buyers when combined with rising interest rates. ‘interest.
“The UK now has one of the highest stamp duty rates in the world for high value goods, which discourages mobility in the housing market. The increases announced today are understandably populist and, unsurprisingly, do nothing to help wealthier shoppers. »
“Unfortunately, the mini-budget has also done nothing to address the war on secondary owners and international buyers with punitive rates imposed on both. I don’t think that’s healthy, especially since many areas depend on tourists to fuel their economy I also think that in a post Brexit world the UK should do all it can to help make us an attractive destination for foreign money and that should include their ability to purchase property without being unduly penalized.
“I hope the Government’s proposals for changes to the planning system will begin to unlock more sites to urgently address the general lack of housing stock, particularly in the south of England. From experience, however, these policies often have little or no effect. The devil will be in the details and I look forward to looking into this further.
Caroline Comer, Director of Sales and Marketing at Comer Homes: “The SDLT holiday, put in place during the pandemic, had a major impact on the property market, prompting buyers to move forward, when there was potential for transaction tax savings. We saw record levels of inquiries and achievements during the period, which was crucial in times of uncertainty We welcome the stamp duty review and the increase in the threshold, which we hopefully stimulate the market, especially after another rate hike and also an impending winter of high energy prices which will have an effect on the level of activity we would normally expect to see.
“We are also pleased to see this amendment in place for an indefinite period, which will help energize the market and instill confidence in buyers. The downside of SDLT’s latest reduction was the fixed period, which has led to a bottleneck over the past few months, putting immense pressure on mortgage companies, chartered surveyors and legal teams, all vital to the completion process but struggled to manage demand, resulting in frustrating collapses.
John O’Malley, managing director of Scotland-based Pacitti Jones, said: “Stamp duty is a poorly thought out tax, which discourages people from moving, so any measure to reduce it, even in the short term, will help encourage people of all ages to move, including older people living in properties larger than they are now needed. It also makes it a bit easier for the younger generation to finance a property, which should help support the volume of real estate transactions that supports important jobs throughout the moving experience.
“The changes to National Insurance contributions should also help struggling businesses and help retain more jobs, which can only be good news for Scotland’s housing market. Plans announced to boost the Economic growth will also support local housing markets.It is imperative that we in Scotland focus on economic growth to improve living standards for everyone.
Heronslea Group CEO Jason Rishover said: “Kwasi Kwarteng presented a robust mini budget this morning, setting out an optimistic growth plan for the UK. We are delighted with the changes to stamp duty, the permanent increase in the threshold from £125,000 to £250,000 is welcome and will be a real boost to the housing market, particularly for first-time buyers, including many have delayed buying a home due to the cost of living crisis.