Law firm Royds Withy King sets out its recommendations for the Government to restart the UK housing market once the lockdown restrictions are lifted.
A Stamp Duty holiday should, says Tim Bunting, an Associate in the Residential Property team at Royds Withy King, be extended to benefit not just first-time buyers, but those looking to move up the property ladder, and property investors.
Tim comments: “First time buyers, or the sub-£250,000 market, clearly need to continue to benefit from any stamp duty holiday, but if we are to successfully kickstart the property market it would need to go one step further and extend into the sub £500,000 market. A Stamp Duty holiday needs to extend to those looking at the second or third move, otherwise any incentive will have limited impact given many sales will involve chains of three or four properties all at different values.
“A complete Stamp Duty holiday is unlikely, so we would urge government to consider a significant, but temporary, reduction in rates on properties over £500,000, which would help both the London and regional housing markets.”
More controversially, Royds Withy King also recommends the temporary scrapping of the 3% surcharge on the purchase of second homes.
Tim says: “We recognise that the Government will need to raise revenues to bolster the Covid-19 support provided, but a buoyant housing market includes those buying second homes or building property portfolios. And a strong housing market underpins confidence across many other industry sectors.
“The scrapping of the 3% surcharge could be for a short period of time, perhaps until lenders reintroduce mortgage products with higher loan-to-values which have largely disappeared from the market.”
Looking to the longer term, Tim argues the Government should consider lowering the higher rates of stamp duty on a permanent basis.
“The increase in the top rate of SDLT was meant to hit the super-wealthy buying prime properties primarily in London. In reality, it has hit those that are looking to buy properties in cities and commuter belts, particularly in London and the South East, where it is their only home or principal asset. Now might be the time for a more radical rethink.”