Capturing the industry’s reaction following announcement that stamp duty will be cut
Following Chancellor Kwasi Kwarteng’s announcement that stamp duty land tax (SDLT) would be cut as part of his mini-budget on Friday, Today’s Conveyancer polled the thoughts of the industry on the impact of the changes moving forwards – here’s what they said.
A holiday’s off the cards
“Our clients and conveyancers will now be breathing a huge sigh of relief that the previous ‘holiday’ model of SDLT changes has been replaced with permanent changes and a much more user-friendly regime for ordinary buyers,” said Helen Hutchison, Head of Irwin Mitchell’s Sheffield Conveyancing Team, in support of the announcement. She added:
“For the majority of our clients this will be a welcome bonus as we head in to what looks like a difficult winter and we are looking forward to processing all our clients with a lower tax bill and no artificial deadlines.”
Similarly, Nick Hale, ONP Group CEO, was encouraged:
“A Stamp Duty change so soon after the last one ending in September 2021 will certainly have sent a ripple through the industry and caused concerns of the last year repeating itself, but the news that thresholds have moved permanently would have been very much welcomed by the conveyancing industry today.
Stimulating the market with a long-term legislative change will take further pressure off the industry expecting firms to meet deadlines and we can focus and work together to bring our pipelines down.”
Rebecca Swain, Head of Residential Conveyancing at Thomson Snell & Passmore, said:
“It is a relief that the cut in SDLT rates is permanent and will take effect immediately. When rumours of a cut surfaced on Wednesday, another time-limited discount (as we experienced during the pandemic) raised fears of further bottlenecks in the market when the period ends, as we saw in June and September 2021.”
Simon Nosworthy, head of residential conveyancing at Osbornes Law, said:
“I’m relieved that this isn’t a barmy stamp duty holiday that creates a cliff edge like as have experienced in past couple of years, but this permanent stamp duty tax cut ultimately isn’t likely to have much of an impact compared to bigger issues that the market faces such as ever increasing demand for housing and increasing mortgage rates.”
Law Society of England and Wales president I. Stephanie Boyce said:
“Today’s announcement means conveyancing solicitors will now be watching and waiting to see how the changes announced by government today will impact their workload and businesses.”
First-time delight
“The Chancellor’s announcement is much needed great news for first time buyers. The government’s changes to stamp duty mean more people will be able to afford to get on the property ladder. It’s especially welcome at a time when interest rates are driving up the cost of borrowing,” said Paula Higgins, Chief Executive of HomeOwners Alliance, who have long-argued against SDLT.
Kate Faulker, analyst at Propertychecklists, was also optimistic, with the most notable impact being on first-time buyers:
“I’m delighted the level for FTBs has been raised. It’s hard enough for London FTBs to get on the ladder and £300k in some cases won’t even support a one bed flat. In fact, Rightmove have around 5,000 properties for sale for under £300k in London, but this increases to 17,000 properties under £425k, so it makes a big difference.
But probably the best bit is that it’s permanent, so no cliff edge for us all to worry about.”
Faulkner did, however, suggest that the wider impact on the property market will be less significant. “I think it may help save a few sales we might lose next year due to the cost of living crisis and higher mortgage rates, but that’s it,” she said.
Jeremy Raj, National Head of Residential Property at Irwin Mitchell, said:
“These new measures will be greeted particularly warmly by buyers at the lower end of the market and by first time buyers, who will either benefit from a significant reduction in the amount of tax payable on transactions already in progress, or – as is the government’s aim – be encouraged to take that first step onto the housing ladder.
Time to “get Britain building”
“The strong focus to ‘get Britain building’ by unlocking government surplus land and extending the stamp duty threshold to help prospective house buyers is a welcome boost in a tough market,” said Brian Berry, Chief Executive of the FMB, though he noted a caveat:
“At a time when we are building fewer homes than needed, however, more action is required to boost delivery of more high quality homes from small, local builders.”
Irwin Mitchell’s Jeremy Raj added:
“Addressing the fundamental supply-side issues in our housing market can only be achieved over the long term.
It is accordingly essential that Government does not now say ’problem solved’ and allow house building and reform of the planning system to drop off the agenda. This is a good fillip to the market, but will not address the key issue of a shortage of the right housing stock in the right locations.”
The policy’s limitations
Simon Brown, CEO, Landmark Information Group, suggested that, while the SDLT cut will stimulate demand, the “inefficiency across the market and failing capacity in the conveyancing process” will reduce any impact on the volume of completions.
Andy Sommerville, Director of Search Acumen, said:
“The reality is that positioning Stamp Duty changes as a tax-cut for hard-working people will land awkwardly on the desks of conveyancers who’ve barely had time to recover from the post-pandemic property boom brought on by the last reforms.
That Stamp Duty ‘holiday’ was nothing of the sort for property professionals left struggling to turn the rusty wheels of the traditional homebuying processes. One year on, these latest reforms only scratch the surface of the modernisation and digital transformation needed to put the housing market on a stronger long-term footing.
With virtually no warning, legal property firms will need to adjust once again to a new Stamp Duty regime without losing sight of the digitisation drive that’s underway across the market, with the AP1 transition deadline that’s fast approaching in November.”
Lloyd Davies, MD of Convey Law and Chairman of the Conveyancing Foundation, said:
“There is absolutely no point in this measure as we do not need to stimulate the property market. The market is buoyant and property prices are still rising. The issue is one of a lack of supply over demand, and so whilst this tax cut is great for those purchasing properties – especially for first time buyers – it does little for a very busy housing market other than to reduce revenue for the government.
Meanwhile, the conveyancing industry is still recovering from the SDLT cuts during the pandemic, which saw a sustained surge in the market and huge transaction volumes, the backlog of which the industry is still struggling to cope with!”
Catherine Williams, partner and head of living at Shoosmiths, said:
“While creating an uptick in activity, these concessions are unlikely to ease the pressures the UK housing market currently faces. This risks creating another mini-boom and furthering the lack of affordability loop.
The changes are unlikely to have a significant effect in London and the South East, with the Chancellor not taking the opportunity to address the existing inequities in the stamp duty system.”
“The announcement of a cut in stamp duty is likely to accelerate movement in an already fluid property market,” said Natalie Bradley, partner in the residential conveyancing department at Stephensons. “However, it also raises questions about whether such a move will simply push up property prices and, in turn, further prevent first time buyers from taking their first step on the property ladder,” she added.
“The cut to stamp duty will be welcomed by people currently buying a house but will not solve the main problem – housing supply,” commented Vicky Quinn-Campbell, Sales and Marketing Director at Simply Conveyancing.
“Today’s announcement is a positive step, although it perhaps focuses overly on first time buyers (FTBs). It does not represent wholesale reform and perhaps does not go far enough,” said Mark Arnold, CEO, Kensington Mortgages.
Dan Salmons, CEO, Coadjute, said:
“This stamp duty announcement underlines the need for this market to have a digital infrastructure that enables it to work efficiently so estate agents and conveyancers have the tools at their disposal to make it function at all times, particularly during periods of higher demand and activity.”
Stephen Ward, their Director of Strategy at the CLC, was keen to remind conveyancers to “always be careful to ensure that they manage workloads to maintain the highest standards of service and advice to clients”.
Nathan Emerson, CEO of Propertymark, said the rebalancing of the thresholds was “long overdue”, though said Propertymark had been hoping that stamp duty for downsizers or last-time movers would also be reviewed.
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