Regional agent: ‘Why I’m glad Stamp Duty cuts are being reversed

A West Midlands estate agent has backed Chancellor Jeremy Hunt’s plans to reverse cuts to Stamp Duty, claiming they should never have been made in the first place.

Hunt revealed in his Autumn Statement last week that changes to the Stamp Duty thresholds announced by his predecessor Kwasi Kwarteng will be reversed in April 2025.

Kwarteng had increased the point at which Stamp Duty is charged on property purchases from £125,000 to £250,000 for home movers. 

The threshold for first-time buyers also increased from £300,000 to £425,000 and can be used on purchases worth up to £625,000.

But despite last month saying these changes would remain, Hunt revealed that he will “sunset the measure” from 31 March 2025.

Dominic Murphy, managing director of Solihull-based DM & Co. Homes, has said these changes should never have been made in the first place, suggesting the market has had enough of Stamp Duty holidays.

He said: “They will result in a new glut of properties on the market, with the over-supply difficult to handle.

“The market had only just started to recover from the previous Stamp Duty holidays and extensions of the same.

“This caused for an outrageous amount of property to come to market over a short period of time, pushing the industry to breaking point and honestly, I said it at the time, and I will say it again – it was not needed.

“Today it is very different, with the post-Covid world that we are living in, the recent needless damage was done to the economy, coupled with the war in Ukraine, rises in inflation and interest rates, and so on.

“But what is it that we are trying to achieve by continuing Stamp Duty breaks? Surely it can only be a short-term gain – are we not simply kicking the can down the road?”

He questioned where the support is for mortgage borrowers, adding: “Personally, I fear for those that that entered into 1% to 2% fixed deals over two or three years that are now perhaps only 12 months from maturing and thus entering what look likely to be base rates of 4% or 5%.

“This will no doubt contribute to those that pushed themselves over the last couple of years, finding themselves in the awful position of being in a property that they can no longer afford when their current mortgage product expires. What happens then?

“Will the government support homeowners that can’t afford their mortgages when products mature – is that going to be the next fallout?

“We have had a good market for the last eight years, the most recent two have been phenomenal – so what is it that we are trying to prevent? The collapse of the housing market as we know it? A complete price correction?”

He suggests that if the Government is going to tweak the property tax, it should go further, adding: “This should have been a time for a complete overhaul of the Stamp Duty system, plus a review of the entire legal system surrounding property transactions.”