Stamp Duty Reduction Only Really Benefited London, Says Zoopla | Money

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The reduction in government stamp duties to restart the virus-hit UK property market has benefited London the most and has so far had little impact elsewhere, according to Zoopla.Reflecting the disproportionate benefit for wealthier buyers, the property’s website said agreed home sales in the capital jumped 27% in the first two weeks of the stamp duty holiday.

The tax, which is paid by homebuyers, has been temporarily removed on properties up to £ 500,000 in England and Northern Ireland by Rishi Sunak as the centerpiece of his summer financial statement this month.

Designed to stimulate real estate transactions and demand for goods and services related to the move – such as real estate agents, notaries, removals and construction – the tax holiday will last until March 31, 2021, at a cost to the Treasury of £ 3.8. bn.

In its monthly assessment of house prices and property sales, Zoopla said the change had less impact on regional property markets than in London. “This increase in transaction volumes has not been replicated in other regions, where average house prices are lower and less sensitive to changes in stamp duties,” the property’s website said.

“While stamp duty relief will support demand in higher value markets [on property priced up to £500,00] in the south of England, demand is unlikely to sustain indefinitely in 2021, ”he added.

Figures released this month by the Rightmove property website indicated that Tory voting areas in London’s outer orbit would likely benefit the most from the stamp duty cut.

Economists said at the time of the summer declaration that the reduction in stamp duties could push up house prices, eroding any gains from the reduction for buyers. According to the Resolution Foundation, an average buyer in the North East of England will see no benefit from the change, while a typical London buyer will save more than £ 14,000.

The thinktank said the average first-time buyer already pays no stamp duty – due to existing stamp duty relief for first-time buyers – except in London, and newcomers to the real estate ladder would therefore not benefit either.

The Chancellor said he used the cut to revitalize the housing market at a time when house prices were falling for the first time in eight years due to the pandemic.

Responding to questions this month from Members of the Commons Treasury Committee, he said, “We thought people who buy, move, sell and then renovate would be good for jobs and economic activity. That is why we have acted as we have done.

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Zoopla said that since the start of 2020, agreed sales were still 20% lower than the same period in 2019 – the equivalent of 124,000 lost sales worth a total of £ 27 billion since March.

At the end of the year, Zoopla said the lag is expected to have recovered slightly, with total trading volume for the year as a whole likely to be around 15% lower than 2019.

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