London, United Kingdom, December 14, 2009 --(PR.com
)-- The 1% tax will be levied on properties sold for over £125,000 from the end of the year, compared with £175,000 now. The Government brought in the holiday in 2008 in order to encourage buyers to purchase – as they already faced a tough lending market.
Although the freeze on Stamp Duty did little to help the London market, where the average home costs well above the £175,000 band, it has helped buyers in other regions of the UK for whom the additional cost presented an obstacle.
Martin Thomson, Manager of Winkworth Sleaford says:
‘We saw a good increase in business after the Stamp Duty holiday announcement. You can buy a four bedroom family home in Lincolnshire for £175,000, so Stamp Duty exemption for properties under £175,000 helps a large number of home buyers in this area. At the moment, I have buyers agreeing to buy property, as long as the sale goes through before Christmas, in order to avoid Stamp Duty.’
The end of the Stamp Duty holiday could have a negative impact in areas such as Lincolnshire, where prices are stable but not yet rising and recovery is six months behind the London market. Where average prices are below the £175,000 mark, the removal of the Stamp Duty holiday could result in a dip in activity.
Other buyers who could potentially be affected by the reintroduction of Stamp Duty are first time buyers. The additional 1% transaction cost is still a major factor for this group of buyers who are already struggling to come up with the funds now required for a deposit.
Figures from the Winkworth website show that around half, and more, properties on the market with Winkworth offices in Cambridgeshire, Lincolnshire, Nottinghamshire and Yorkshire are priced under £175,000.
However, in Yorkshire, where 74% of Winkworth properties on the market are under the £175,000 cut-off point, the freezing of Stamp Duty back in September 2008 only made a difference to the £150,000-£175,000 range market. Properties under £150,000 in this area constitutes 65% of all properties – meaning a large portion of the Yorkshire market will be unaffected by the reintroduction of Stamp Duty for properties over £120,000.
In comparison, Winkworth offices in London have a very low percentage of properties on the market under the £175,000 limit – in central London there are none at all. This signals that the change to the Stamp Duty periphery will have little effect on the London property market.