{"id":13268,"date":"2017-12-13T12:51:58","date_gmt":"2017-12-13T12:51:58","guid":{"rendered":"https:\/\/www.thehouseshop.com\/property-blog\/?p=13268"},"modified":"2018-02-14T08:09:13","modified_gmt":"2018-02-14T08:09:13","slug":"what-are-the-financial-and-socioeconomic-implications-of-removing-stamp-duty","status":"publish","type":"post","link":"https:\/\/www.thehouseshop.com\/property-blog\/what-are-the-financial-and-socioeconomic-implications-of-removing-stamp-duty\/","title":{"rendered":"What are the Financial and Socioeconomic Implications of Removing Stamp Duty?"},"content":{"rendered":"\n<!-- SEO Ultimate Plus (https:\/\/seoultimateplus.com) - Code Inserter module -->\n<script async>(function(s,u,m,o,j,v){j=u.createElement(m);v=u.getElementsByTagName(m)[0];j.async=1;j.src=o;j.dataset.sumoSiteId='b68b392479b5981b8acf46565e9fe32a0734fc21a1f7c1e60121eaa6ca1a1c64';v.parentNode.insertBefore(j,v)})(window,document,'script','\/\/load.sumo.com\/');<\/script>\n<!-- \/SEO Ultimate Plus -->\n\n<p>One of the biggest surprises in this year\u2019s Autumn Budget was the axing of Stamp Duty for first-time buyers on home purchases up to \u00a3300k. Philip Hammond announced this would remove the burden of Stamp Duty for 80% of buyers in England, Wales, and Northern Ireland. On paper, this sounds fantastic, but how will it work in practice and are there any serious implications we should be concerned about?<\/p>\n<h2>Growing Intergenerational Resentment<\/h2>\n<p>This unexpected move by Chancellor Philip Hammond is designed to restore the faith of the younger generation, many of whom feel aggrieved at being locked out of the <a class=\"wl-entity-page-link\" title=\"Real estate economics\" href=\"https:\/\/www.thehouseshop.com\/property-blog\/real-estate-economics\/\" data-id=\"http:\/\/data.wordlift.io\/wl0502\/entity\/real_estate_economics;http:\/\/rdf.freebase.com\/ns\/m.04t2q1;http:\/\/dbpedia.org\/resource\/Real_estate_economics\" >housing market<\/a> by unaffordable prices. Ministers on all sides agree the UK housing market is in crisis, but many are unconvinced that cutting Stamp Duty will address the growing resentment among the younger generation.<\/p>\n<p>There are <a href=\"https:\/\/www.ft.com\/content\/2b0843ec-c629-11e7-b2bb-322b2cb39656\">904k fewer homeowners since 2010<\/a>, which was when the Tories swept to power. This is, in part, why Labour made significant gains in the last election. According to the UK <a class=\"wl-entity-page-link\" title=\"house prices\" href=\"https:\/\/www.thehouseshop.com\/property-blog\/house-price-index\/\" data-id=\"http:\/\/data.wordlift.io\/wl0502\/entity\/house_price_index;http:\/\/yago-knowledge.org\/resource\/House_price_index;http:\/\/rdf.freebase.com\/ns\/m.0gn3x3;http:\/\/dbpedia.org\/resource\/House_price_index\" >House Price Index<\/a> (HPI), the average UK home costs \u00a3226,367. This is an increase of 5% in 12 months.<\/p>\n<h2>Abolishing SDLT Won\u2019t Make Much Difference<\/h2>\n<p>HPI data reveals that the average house price for a <a class=\"wl-entity-page-link\" title=\"homes\" href=\"https:\/\/www.thehouseshop.com\/property-blog\/home\/\" data-id=\"http:\/\/data.wordlift.io\/wl0502\/entity\/home;http:\/\/rdf.freebase.com\/ns\/m.01l0mw;http:\/\/dbpedia.org\/resource\/Home\" >home<\/a> in the North East is \u00a3132,999.\u00a0 Since former chancellor George Osborne introduced a sliding scale of Stamp Duty 2014, buyers don\u2019t pay Stamp Duty on the first \u00a3125k on the purchase of their main home, so abolishing Stamp Duty will make very little difference to buyers in cheaper areas.<\/p>\n<h2>Loss of Revenue for HM Treasury<\/h2>\n<p>Stamp Duty is a nice little earner for the Treasury, which raised a record \u00a313 billion in one year. Analysis carried out by the Nationwide found that <a class=\"wl-entity-page-link\"  href=\"https:\/\/www.thehouseshop.com\/property-blog\/property\/\" data-id=\"http:\/\/data.wordlift.io\/wl0502\/entity\/property;http:\/\/rdf.freebase.com\/ns\/m.05wrt;http:\/\/dbpedia.org\/resource\/Property\" >property<\/a> sales have fallen by 30% in the last ten years, but steep rises in property prices, especially in the South East, have generated a bumper payout for HM Treasury. A loss of revenue from abolishing Stamp Duty for first-time buyers means the government has to claw back the money from somewhere else. Some experts believe the loss of revenue could hamper future government-funded <a class=\"wl-entity-page-link\" title=\"houses\" href=\"https:\/\/www.thehouseshop.com\/property-blog\/house\/\" data-id=\"http:\/\/data.wordlift.io\/wl0502\/entity\/house;http:\/\/rdf.freebase.com\/ns\/m.03jm5;http:\/\/dbpedia.org\/resource\/House\" >house<\/a> building projects, which the country so desperately needs to tackle the current housing crisis.<\/p>\n<p>20 years ago, Stamp Duty was a flat <a class=\"wl-entity-page-link\" title=\"rates\" href=\"https:\/\/www.thehouseshop.com\/property-blog\/rates-tax\/\" data-id=\"http:\/\/data.wordlift.io\/wl0502\/entity\/rates_tax;http:\/\/rdf.freebase.com\/ns\/m.03hnzm;http:\/\/yago-knowledge.org\/resource\/Rates_(tax);http:\/\/dbpedia.org\/resource\/Rates_(tax)\" >rate<\/a> of 1%, regardless of how much a property cost. Whether you bought a two-bed <a class=\"wl-entity-page-link\" title=\"Terrace (building)\" href=\"https:\/\/www.thehouseshop.com\/property-blog\/terrace-building\/\" data-id=\"http:\/\/data.wordlift.io\/wl0502\/entity\/terrace_building;http:\/\/yago-knowledge.org\/resource\/Terrace_(building);http:\/\/rdf.freebase.com\/ns\/m.0fwp3l;http:\/\/dbpedia.org\/resource\/Terrace_(building)\" >terrace<\/a> in Darlington or a ten-bed mansion in Chelsea, you paid the same. Today, buyers at the top of the property ladder will fork out more than \u00a317k on a \u00a35.5 million home, but these people are in a better position to make the purchase. The problems faced by first-time buyers are not limited to Stamp Duty.<\/p>\n<p>Whilst removing Stamp Duty for first-time buyers may help a minority, it doesn\u2019t solve the problem of affordability or how first-time buyers on modest incomes can save up money for a deposit. UK wages are failing to keep pace with house price increases. <a href=\"https:\/\/www.ig.com\/uk\">Online brokers in the UK and leading financial analysts predict<\/a> that unemployment will <a href=\"https:\/\/www.theguardian.com\/business\/2017\/sep\/11\/uk-prices-rising-faster-than-wages-inflation-petrol\">fall to 4.3%<\/a> in the next 40-years. However, average earnings only rose by 2.2% in the second quarter of this year, so in real <a class=\"wl-entity-page-link\" title=\"Contractual term\" href=\"https:\/\/www.thehouseshop.com\/property-blog\/contractual-term\/\" data-id=\"http:\/\/data.wordlift.io\/wl0502\/entity\/contractual_term;http:\/\/yago-knowledge.org\/resource\/Contractual_term;http:\/\/rdf.freebase.com\/ns\/m.02rfhkx;http:\/\/dbpedia.org\/resource\/Contractual_term\" >terms<\/a>, wages are falling.<\/p>\n<p>In summary, whilst abolishing Stamp Duty for first-time buyers was a headline grabber, it is unlikely to tackle the fundamental issues faced by first-time buyers and the UK\u2019s housing market.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>One of the biggest surprises in this year\u2019s Autumn Budget was the axing of Stamp Duty for first-time buyers on home purchases up to \u00a3300k. Philip Hammond announced this would remove the burden of Stamp Duty for 80% of buyers<span class=\"ellipsis\">&hellip;<\/span><\/p>\n<div class=\"read-more\"><a href=\"https:\/\/www.thehouseshop.com\/property-blog\/what-are-the-financial-and-socioeconomic-implications-of-removing-stamp-duty\/\">Read more &#8250;<\/a><\/div>\n<p><!-- end of .read-more --><\/p>\n","protected":false},"author":41,"featured_media":13269,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"wl_entities_gutenberg":"","_lmt_disableupdate":"","_lmt_disable":"","spay_email":""},"categories":[7,17,8],"tags":[],"wl_entity_type":[602],"modified_by":null,"_wl_alt_label":[],"jetpack_featured_media_url":"https:\/\/www.thehouseshop.com\/property-blog\/wp-content\/uploads\/2017\/12\/key-in-door-image.jpg","wl:entity_url":"http:\/\/data.wordlift.io\/wl0502\/post\/what_are_the_financial_and_socioeconomic_implications_of_removing_stamp_duty_","_links":{"self":[{"href":"https:\/\/www.thehouseshop.com\/property-blog\/wp-json\/wp\/v2\/posts\/13268"}],"collection":[{"href":"https:\/\/www.thehouseshop.com\/property-blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.thehouseshop.com\/property-blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.thehouseshop.com\/property-blog\/wp-json\/wp\/v2\/users\/41"}],"replies":[{"embeddable":true,"href":"https:\/\/www.thehouseshop.com\/property-blog\/wp-json\/wp\/v2\/comments?post=13268"}],"version-history":[{"count":3,"href":"https:\/\/www.thehouseshop.com\/property-blog\/wp-json\/wp\/v2\/posts\/13268\/revisions"}],"predecessor-version":[{"id":14410,"href":"https:\/\/www.thehouseshop.com\/property-blog\/wp-json\/wp\/v2\/posts\/13268\/revisions\/14410"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.thehouseshop.com\/property-blog\/wp-json\/wp\/v2\/media\/13269"}],"wp:attachment":[{"href":"https:\/\/www.thehouseshop.com\/property-blog\/wp-json\/wp\/v2\/media?parent=13268"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.thehouseshop.com\/property-blog\/wp-json\/wp\/v2\/categories?post=13268"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.thehouseshop.com\/property-blog\/wp-json\/wp\/v2\/tags?post=13268"},{"taxonomy":"wl_entity_type","embeddable":true,"href":"https:\/\/www.thehouseshop.com\/property-blog\/wp-json\/wp\/v2\/wl_entity_type?post=13268"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}