Call to reform stamp duty

Coventry Building Society is advocating for reform in Stamp Duty due to a notable decline in property transactions, particularly buy-to-let purchases, during the first quarter of 2024. This drop is significant, as it’s the first time transactions have fallen below 200,000 since the temporary Stamp Duty holiday in July 2020, reaching levels last seen in 2011. Coventry’s head of mortgage relations, Jonathan Stinton, suggests that while the decrease was anticipated after the Stamp Duty holiday ended, the continued decline indicates a need for reform to stimulate long-term stability rather than short-term fixes, stating that ‘The number of people moving home was always expected to drop once the stamp duty holiday in 2020-21 was over, but the number has kept on dropping and now we’re back to 2011 levels.’

He added that long-term changes to the system ‘could not only put money back in the pocket of purchasers – it could also oil the wheels of the market and make it easier for people to move up and down the ladder throughout their lifetime.’   

Their proposal highlights the burden of Stamp Duty on homebuyers, with a decrease in transactions below the £250,000 threshold and a rise in those falling within the 5% Stamp Duty band. This has led to an increase in the average Stamp Duty bill, impacting both buyers and the rental market. The declining number of additional property transactions, such as buy-to-let, further underscores the need for reform.

Coventry suggests that simply reinstating temporary holidays or making simplistic cuts may not be effective in the long term. Instead, they advocate for carefully considered reforms that address the current challenges in the market. There’s speculation that changes to Stamp Duty could be announced in the Autumn Statement, potentially increasing the threshold for Stamp Duty payments.

Overall, Coventry Building Society’s call for Stamp Duty reform reflects concerns about its impact on property transactions and the housing market’s overall health.

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