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Economy

Stamp Duty changes not enough

Written by Roberta Murray
Tuesday, 02 September 2008
PriceWaterhouseCoopers: Construction industry not likely to benefit. The temporary raising of the stamp duty land tax (SDLT) threshold on house purchases from £125,000 to £175,000 has been welcomed by many industry commentators, however PriceWaterhouseCoopers says it is not enough to fundamentally lift the economy. Related Articles Basis point rate cut called for Millenials at work: myths exposed PwC calls for drastic rate cut Paul Davies joins PwC RICS says no turn around yet John Hawksworth, head of macroeconomics at PricewaterhouseCoopers said, "this measure will provide some support for the lower end of the housing market, but with mortgage lending still very constrained and confidence low, it is unlikely to be enough to prevent further significant falls in average UK house prices over the next 6-12 months." Jonathan Hook, construction and housebuilding leader at PricewaterhouseCoopers however said it was the lack of mortgages that would ultimately outweigh any benefits presented by todays announcements. He said that, "whilst any measure that gets the first time buyer housing market moving again is welcome, I suspect that the current lack of availability of mortgage finance and people's general concerns about the direction of the economy will outweigh the benefits of a one year measure such as this." Keith McNeilly of Moveme.com who was yesterday quoted by DoF Online as saying the threshold on Stamp Duty should be raised to at least £250 000 this morning said, "news that stamp duty will be scrapped immediately for properties under £175,000 will encourage first time buyers back to the market." He said there would be a positive knock on effect throughout the economy. "We welcome decisive action from the Government at last, ending the uncertainty over the future of stamp duty which bought the housing market to a grinding halt almost a month ago," he said. However McNeilly believes the changes will have very little effect on the market in the South East and London where prices are highest in the UK.