31
May
How has the end of the stamp duty holiday affected the property
market?
It was announced by the chancellor George Osborne in his budget at
the end of March that the popular stamp duty holiday, which had
seen somewhere in the region of 170,000 first-time buyers able to
purchase a house without having to pay the additional one per cent
levy on top of the home value, would not be continued beyond its
March 24th cut off.
At the time it was said that this decision could end up being
detrimental to the property market as a whole, because those who
were looking to purchase a home would no longer feel particularly
desperate to go out and purchase, and it would simply be the case
that many would wait until conditions improve.
But how has it all worked out, with figures now announced for the
first month following the end of the stamp duty holiday ending? Has
it really been as bad as people predicted in the market?
The Council of Mortgage Lenders (CML) said earlier this month that
its findings for the month of April had shown that gross mortgage
lending had dropped throughout April. It said that the amount of
money handed out to buyers throughout the month alone was a full 19
per cent lower than in the weeks previous.
This came on the back of a swell of new mortgages at the end of
March and February as people flocked to purchase homes without
having to pay stamp duty.
Ben Wilkie, editor at What Mortgage, said that it was undoubtedly
the case that the end of the waive on the stamp duty payments had
an overall effect on people's purchasing intentions.
"It is not too surprising simply because of the end of the stamp
duty holiday. I think lots of people were working to save up a
deposit and have decided that is now sensible to hold off until
they find the exact property that they want or the exact mortgage
that they want.
"It is not surprising that there was a big drop compared to March
because March was a very busy month comparatively," Mr Wilkie
noted.
However, this was surprisingly not the opinion held by all in the
property market. Chief economist of the CML Bob Pannell said that
it is the case that the financial crisis across Europe as a whole
has had a detrimental effect on the buying intentions of
many.
"The underlying picture is likely to be one of easing momentum in
the housing market, but with potential for a sharper downwards
correction on bad eurozone news," he explained.
In addition to this Sue Hopson, brand standards director at Martin
& Co, said that the fact that the economy remains tight in the
UK was the real issue for many buyers. She said that at a time when
it is less likely that people will feel confident in their jobs,
and with the rates for mortgages still sitting reasonably high
across the UK, many people are simply waiting until they can find
better conditions under which to buy their first home.