140,000 “extra” transactions have been generated in the UK from the stamp duty holiday, but who really benefits?
According to a report from the London School of Economics (LSE), homeowners saved on average £15,000 of Stamp Duty Land Tax (SDLT) from the scheme, which may be seen as a success in stimulating the housing market and related expenditure.
Although the SDLT saving is of direct to house buyers, it is questionable where the value really ends up. Eight months of uninterrupted house price growth saw UK average house prices increase by 10 per cent over the year to May 2021, coinciding with the SDLT holiday. Time will tell whether we’ll see an element of price correction once the SDLT holiday ends fully from October this year.
Furthermore, alongside a saving in SDLT, the LSE identified an increase in post-transactional property expenditure. On average, the expenditure amounted to £16,000 per transaction, with popular alterations being bathroom and kitchen renovations, plumbing and rewiring, as well as furniture. So buyers, sellers and the wider property industry may all have shared in the benefit.
Buyers may well have been paying more, then spending more, yet still perceive they have saved money. In context though, the UK gross domestic product totalled £1.96trn in 2020, but only £2.2bn was attributed to the stamp duty holiday – that’s around 0.1 per cent of countrywide spending!
Get in touch
If you have any questions regarding the recent changes in SDLT, get in touch with our Private Client Services’ team on 01788 539000 or 0116 261 0061.
Read more blog articles from Magma here: https://www.magma.co.uk/blog