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Rishi Sunak’s stamp duty changes cheered by estate agents and housebuilders

PA
PA

Chancellor Rishi Sunak has outlined stamp-duty changes in a move that estate agents and builders hope will boost home purchases following a turbulent period for the sector.

Shares in housebuilders and estate agents increased after the chancellor spoke. Sunak said “uncertainty abounds in the market” just ahead of announcing these changes today:

- Right now, there is no stamp duty on transactions below £125,000 (or £300,000 for first-time buyers). Sunak is increasing the threshold to £500,000.

- Everyone buying a main home under £500,000 will pay no stamp duty at all. It takes effect today until March 31st 2021 and means 9/10 people of main home buyers will pay no SDLT at all.

Barratt Developments moved higher up the FTSE 100 league table, adding 10.6p at 539p and Persimmon gained 50p at 2462p. Shares in Savills rose 19p at 810p, and OnTheMarket climbed 1.4p at 89.9p.

The update follows a tough period for the housing sector which was hit in March when the Covid-19 lockdown started. People were initially encouraged to avoid moving possible where possible. Those restrictions were eased in May when viewings were permitted again, and estate agents and show homes could reopen.

A number of businesses in the housing industry welcomed the update. Tim Hyatt, head of residential at Knight Frank, said: “Today’s announcement to temporarily cut stamp duty will act as a shot in the arm for UK housing and further bolster a market which has come out of a state of suspension. However, in order for a fully functioning market to return, the availability of higher loan to value mortgages must also be improved to support first time buyers across the country.”

Richard Donnell, research and insight director at Zoopla said: "The immediate increase in the Stamp Duty threshold will help sustain the rebound in housing market activity across England. The benefits will be immediate; nine of ten transactions in England will no longer be subject to the tax and in London and the South East, home to more expensive properties, homebuyers can save up to £14,999 overnight."

He added: “The Government will expect the change to stimulate more housing sales over the second half of the year and that savings made by buyers will be reinvested in home improvements, white goods and furniture, rather than bidding up the cost of housing."

Nick Leeming, chairman of estate agency Jackson-Stops, said: “Sunak’s stamp duty reform has come at the right time and will have an immediate impact on the volume of sales agreed in the coming weeks. With nearly one fifth of UK adults considering a home move in the next 12 months, this stamp duty holiday unlocks great potential for the market."

Marc Vlessing, chief executive of housebuilder Pocket Living, said: “The Chancellor’s announcement on stamp duty is helpful, but fundamentally if we are to address the housing crisis we must build more homes of all types, including affordable homes for first time buyers.”

More to follow....

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