Putting stamp duty into context

A welcome change

The stamp duty changes were clearly positive. Although some have said that the changes will not have a big impact (see Oxford Economics research in this area), much of this impact is not measurable with accuracy and most of the immeasurable elements are positive. Does it solve the reduction in LTVs for most first-time buyers? No, but it certainly helps. More importantly, it is one of many methods used to mitigate against an economic slump. It is not intended as a means to generate a property boom or restore the market to a pre-Covid nirvana.

The impact of the stamp duty changes is broader than the effect on transactional price. The changes bring and encourage positivity, a reason to buy, a cushion against further falls; they give potential buyers an extra tick in the box to buy now and not later. In short, they have a positive effect on buyer sentiment which is crucial in mitigating the impact of the economic decline. It all helps to turn property market uncertainty into action. But as welcome as this all is, so much more is needed to impact buyer sentiment in a material and meaningful way.

Part of a bigger problem

Whilst stamp duty is a significant tool, it is but one tool. The approach to mitigating against this economic crisis is not mortgage-focused, or even property-focused; it is economy-wide, and it needs to be. Let’s be clear, the state of public health aside, this is an economy-wide crisis, not a property or financial crisis. Placed into that context, the stamp duty changes are not as significant as some of us focussed on our sector may believe. But what’s important is that it was a positive step for buyers, sellers and for the economy as a whole.