Like most in the agency world, I suspect you (like us) have been digesting the changes to stamp duty introduced in Chancellor George Osborne's Autumn Statement last month. I would also imagine that you have been taking many calls asking you to explain to clients why you didn't know the change was coming, particularly those who may have exchanged contracts at the end of November.
It's unfortunate for those who might have saved significant sums of money, however, we have to be honest and say that, while many of us have been calling for changes to stamp duty for longer than we care to remember, the fact is that the changes were not leaked or highlighted prior to the Statement being made. Osborne certainly kept his powder dry in that regard and, as many have highlighted, the proverbial rabbit in the hat' was delivered with barely concealed glee at the end of his speech.
The change to a more progressive system of stamp duty is long overdue -my own view has been that the previous slab' threshold was fundamentally unfair and reform was a long time coming. And while we at Century 21 welcome any reform, I'm sure Osborne could have gone that little bit further by scrapping stamp duty entirely for homes under £500k and indexing the remaining thresholds to inflation. That being said, it is now a much fairer system and gets rid of the grossly distorting impact of the previous system.
The major point to discuss now is just how the changes will impact the housing market which has (let's be honest) not exactly set the world alight in terms of activity over the past few months. Recent statements by RICS (Royal Institution of Chartered Surveyors) appear to suggest that, the surveying profession at least, anticipates the stamp duty changes providing a real boost. It believes transactions will increase by between 2 and 5% on the back of Osborne's announcement and, at the same time, raise the supply of homes coming to market. Good news for agents.
Even with the Office of Budget Responsibility anticipating a softer boost to transaction levels because of the stamp duty changes - it suggests an increase in annual property sales by 1% in the long run - there is clearly greater cause for optimism that the market will receive a boost. We also anticipate a process of re-valuations to begin taking place immediately - we're only too acutely aware of the distorting impact the previous thresholds placed on sales prices and it is important that the market corrects that.
And, in the long run, while Osborne's move appears to have been a political stroke of genius, the ongoing tax saving - estimated to be around £750m - will (in all likelihood) be recouped quickly through the anticipated increase in activity that should result and the fact that house prices are likely to continue to rise. Which makes you wonder why this change wasn't implemented a long time ago - perhaps we should simply enjoy this welcome break with the unpopular past.
*Rob Clifford is Chief Executive of CENTURY 21 UK
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