Darlington Building Society has welcomed today’s announcement by Chancellor Rishi Sunak of a temporary cut in stamp duty, raising the starting threshold from £125,000 to £500,000.
The Society, which has maintained an “Open for Business” strategy throughout the coronavirus crisis, has reported a healthy level of activity in the mortgage market since the Government’s easing of lockdown restrictions.
The Society’s chief executive, Andrew Craddock, described the changes to stamp duty, outlined in the summer statement by Mr Sunak, as “an important stimulus to the housing market”.
In his speech to the House of Commons, The Chancellor stated that property transactions nationwide had fallen by 50 per cent in May, with house prices falling for the first time in eight years. He announced that the changes in stamp duty would be immediate and continue until March 31 next year.
Mr Craddock said: “The economy relies so much on property transactions, so raising the threshold for starting to pay stamp duty from £125,000 to £500,000 is a very welcome and positive step.
“It was important that the change was made without delay, and house-buyers now have a clear window in which to take advantage of a move which will see a reduction of £4,500 in the average stamp duty bill.
“This change will not directly affect first-time buyers who already have a threshold of £300,000 before they start paying stamp duty. However, it will be a major incentive to second-time movers and that, in turn, will have a knock-on effect by creating more stock for first-time buyers.”
Despite welcoming the Chancellor’s statement, Mr Craddock sounded a note of caution because of continuing widespread anxiety over jobs.
“It is important to recognise that a lack of confidence over job security is one of the biggest barriers to people taking out a mortgage and buying a property said Mr Craddock. “Therefore, we also welcome the fact that the changes to stamp duty are accompanied by further measures from the Chancellor aimed at job retention and creation.”
Mr Craddock has also called for wider reforms of stamp duty beyond the deadline of March 31 for the temporary cut.
“Hopefully, the period between now and next year will be used to look in detail at much-needed wider reform of stamp duty so that the momentum provided by this temporary stimulus can continue,” he said.