Fresh data from UK Finance has found that Stamp Duty receipts fell by 24% to £11.6bn in the year to March 2024, with experts citing the ongoing affordability crisis and sky-high mortgages as principle factors behind the collapse in transactions.
The collapse in demand for housing has led to a forecast decline in house prices over the course of the year, with Halifax anticipating a decline of 2-4% by the end of 2024.
According to David Hannah, Group Chairman of Cornerstone Tax, the UK’s leading property tax consultancy, the next government ought to address the following three policy areas in order to kickstart the housing market, encouraging prospective buyers and easing the mortgage burden.
Stamp Duty
According to David Hannah, reforms to Stamp Duty thresholds as opposed to looking at rate cuts would be essential in getting the bottom end of the housing market moving in the long-term. Raising the threshold would have the benefit of taking more properties outside the scope of stamp duty, cutting the cost of acquisition for people looking to get onto the property ladder.
A scrapping of the second-home surcharge would also grease the wheels of the private rental sector, encouraging buy-to-let landlords to expand their portfolios and provide renters with a greater range of options.
David Hannah said, “SDLT payment bands have been long overdue for an overhaul as they have never been index-linked to house price inflation. An increase to these thresholds would stimulate activity at the lower end of the property market and allow first-time buyers to reduce the amount they need to borrow, thus improving their affordability calculations.
“As we all know, a rising tide lifts all boats, those looking to purchase properties on the mid-to-high end of the property market will now have a chance to sell their low-end properties as a result of the increase in demand from prospective buyers, contributing to further momentum within the housing market.”
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