Property peer-to-peer lending platforms have received a boost from Chancellor Rishi Sunak’s stamp duty cut outlined in his mini-Budget today.
In England and Northern Ireland, stamp duty land tax on the purchases of homes up to £500,000 will be removed until 31 March 2021. The move does not apply to Wales and Scotland as stamp duty is a devolved issue in those jurisdictions.
“It’s a good policy,” said Mike Bristow, chief executive of P2P development lending platform CrowdProperty.
“It definitely gives the housing market a boost because it will mean those thinking of buying in that bracket that might be deferring it to get slightly greater certainty, may bring their purchase forward and therefore there will be more purchases happening and sooner, which brings greater movement for the economy.”
Stuart Law, chief executive of business and property P2P lending platform Assetz Capital, welcomed the changes, claiming they will have a positive effect on the market and help to partly make up for the larger deposits now required by buyers.
“As the first link in the housing chain, first-time buyers are the foundation of the whole housing market, so we support any changes that benefit this group,” he said.
“The government could, and should, go further however, taking a pragmatic view that this change alone isn’t going to fully balance the negative impact of the virus on the housing market.
“We’d also advocate all of the recent buy-to-let taxes being removed for the next five years, as buy-to-let investors could potentially step in where first-time buyers can’t and support the bottom of many housing chains and prevent them failing.
“This means the three per cent extra stamp duty on buy-to-let purchases should be removed as well and the removing the mortgage interest tax also recently introduced.
“At a time when we will now doubtless see greater rental demand from virus-delayed first-time buyers, more rental property will help keep rents down. This would give first-time buyers a chance to save more towards the new larger mortgage deposits required.”
Estate agents were pleased with the news too.
Research from Benham and Reeves has found that 84 per cent of transactions made in the past six months would have seen the amount owed in stamp duty eradicated if this cut was in place then.
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“There’s no denying that this should bring about a monumental boost for homebuyers going forward,” said Marc von Grundherr, director of Benham and Reeves.
“However, some may also argue that it’s not before time. Stamp duty is simply an additional financial barrier when buying and one that does little more than filling the government’s pockets.
“While the market has weathered the storm of pandemic price decline so far, this latest move should help keep property values buoyant.”