Stamp duty holiday cost £6.4bn and helped rich house buyers in south, analysts say

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Analysts say the stamp duty holiday introduced by Covid cost the Treasury £6.4bn and helped wealthy homebuyers, mainly in the south of England.

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Rishi Sunak’s policy punished first-time buyers by increasing competition and sending property prices even further out of their reach, he concluded.

The analysis comes after the end of a 15-month holiday – introduced in July 2020, when the chancellor feared the pandemic would hit the housing market – and is based on official data.

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property agent Sevilles Put the bill at £6.4bn – nearly double the estimated £3.8bn when the tax break was announced – and said that almost half of the profits went to buyers of homes over £500,000.

trick roads, a property search app, uncovered a north-south divide – meaning London and the South East had four times more profits than the three northern regions.

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It said the biggest winners were homebuyers in the South East (£1.2bn), followed by London (£1bn), giving them to the North West (£300m), Yorkshire (£218m) and the streets ahead of the North East (£66m). Was placed. ,

Moreover, with the stamp duty holiday, the major reason for the jump in home prices since the summer of 2020, home buyers were warned that they are now effectively out of pocket in thousands.

comparison site GetAgent.co.uk stated that the average price increase was £37,156 or 14.8 per cent – ​​and was even higher in the North West (20.7 per cent) and the North East (17.8 per cent).

Its chief executive Colby Short warned: “Many may be wondering, was it really worth it?

“To rub salt in the wounds, those now entering the market are faced with a daunting task as a result of the astronomical levels of increase in home prices seen since the summer of last year.”

The Treasury strongly defended the holiday, saying: “Our temporary stamp duty cuts helped protect hundreds of thousands of jobs that depend on the property market by stimulating economic activity.”

But George Dibb, head of the IPPR think tank’s Center for Economic Justice, said: “Even before the pandemic, home prices in the UK were too high for most people – yet the stamp duty holiday drove prices up further.

“Climbing the housing ladder is now more difficult than ever, and those struggling to save for deposits will be outraged that government policies have made it even more difficult.”

And Lucian Cook, Savills’ head of residential research, suggested the Treasury “looks back at it and realizes it’s been a pretty generous tax break at a time when the market is strong”.

In March this year, Mr Sunak extended the stamp duty holiday till the end of June for purchases up to £500,000 and till the end of September for purchases up to £250,000.

The Treasury said the property market was concerned with the sale of about 160,000 homes stuck in the balance and at risk of collapsing if it ended immediately.

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Credit: www.independent.co.uk /

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