As thousands hurried to meet the first Stamp Duty Holiday in July and with many of us still racing against the clock to meet the second and final deadline at the end of the month, the question has risen: was the Stamp Duty Holiday necessary?
Throughout 2020 and well into 2021, the housing market was a hive of activity as buyers benefited from savings of thousands of pounds in tax – an incentive introduced by the government to stimulate the economy in an extraordinary global crisis.
New opportunities were opened up for so many, the market was alive with buyers excited at the prospect and as demand rose, so did prices. The average house price rose by an incredible record 13.2%* between June 2020 and June 2021.
It’s been reported that the Stamp Duty Holiday could cost the government around £4.4billion in forgone taxes by next year and some experts now say it might not be responsible for the unprecedented increase in demand.
New evidence suggests that demand was likely to have increased over the last 18 months, despite any tax breaks.
So, what else could have caused the housing demand to increase?
Well, we’ve previously discussed the drastic shift seen in priorities as a result of the pandemic forcing us indoors to revaluate things. Over the last year, we’ve seen searches for properties with additional rooms, gardens and green space increase and, for the first time ever, Cornwall even claimed the top spot from London as the most searched location.
Definitive proof that many of us are looking at things differently as a result of Covid-19.
Another factor that could have contributed to the desire to move home is losing the ability to travel and holiday abroad, or meet with friends and visit pubs, clubs and restaurants. This restriction would have helped many to save much more than they otherwise would have been able to.
So, with or without a Stamp Duty Holiday, many of us were spending more time than we ever had before staring at the same four walls – picking apart our homes and wishing for something different – with considerably more savings.
Many believe the Stamp Duty Holiday was launched prematurely and that it would have been better served now, as the market is showing signs of cooling.
Ultimately, there is no way of knowing what would have happened over the last 18 months without the tax holiday and there is every chance that the busiest housing market we’ve seen in more than 20 years was a result of many different factors – a change in circumstances, paired with additional savings.
One thing is for certain and that’s that the Stamp Duty Holiday has helped thousands of our customers move forward in a very worrying time.
With fewer properties available, as the market begins to slow, it’s never been more important to get yourself in the best possible position to sell. Speak to us today to find out how we can help you to get ahead of the competition and view new homes before they even hit property sites – like Rightmove and Zoopla.