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UK house prices: Stamp duty reforms have saved homebuyers £1.9bn since last year


12-07-2015

 

House Prices Hit New High In The UK

For 98 per cent of homebuyers, changes to stamp duty system has meant big savings (Source: Getty)

The chancellor’s stamp duty reforms may have added to the bill for high-end homes.

But for the vast majority who have bought homes under £1m, the measures have represented huge savings.

UK homebuyers have collectively saved £1.9bn since the old slab was abolished last December and replaced with a more progressive tax system, figures from conveyancing services provider My Home Move Show.

A poll of estate agents showed that 87 per cent said the changes have had a “positive impact on the market” with each buyer saving an average of £1,500.

Doug Crawford, chief executive of My Home Move said the reforms had given “a much needed boost or those struggling to get on the housing ladder” and facing further price rises.

“The old “slab” system was ripe for reform as it was creating a stranglehold over the market, especially where property prices neared the stamp duty thresholds, and in particular around the £250,000 mark. Thanks to the reforms, people are now able to sell their homes for a truer value,” he added.

However, the reforms have dealt a blow for buyers of homes over £937,000 with recent data showing a sharp slowdown in sales at the top of the market.

Properties sold for over £1.5m are now subject to a top rate of 12 per cent – add at least £18,750 to their stamp duty bill – which has contributed to lower demand in the London housing market.

In October, sales of £1.5m-plus homes fell by 28 per cent year-on-year to 261, while those between £800,000 and £1m fell by 10 per cent to 1,069.

“With a slowdown now being felt towards the top end of the market, it could cause a worry for the Government as receipts from stamp duty start to fall. However, following last week’s announcement of a three per cent stamp duty surcharge for buy-to-let investors, any deficit could be offset from April,” Crawford added.

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