Regional response to end of stamp duty holiday

With the stamp duty holiday due to end on 31st December, the Royal Institution of Chartered Surveyors (RICS) is warning that a return to the previous structure of the tax could have a detrimental affect on the UK’s fragile property market.

According to the body, regions that are already lagging behind in the recovery will be worst affected.

In a recent poll of members, the RICS found that surveyors in the West and East Midlands, Wales and Scotland are expecting housing market activity to decline in 2010, as stamp duty once again becomes payable on purchases of £125,000 and above (currently £175,000).

However, in London and the South East, no falls in transactions are anticipated when the concession ends, as average house prices are already well above £125,000.

Surveyors in the North of England are in agreement, but in this case because the average price of a home is well below the threshold, at at £116,051.

RICS chief economist, Simon Rubinsohn, comments: “At the time of its introduction, we did question how great an impact this policy would have and judging by the fact that only surveyors in certain parts of the country are particularly concerned about the ending of the holiday, it could be said that some areas of the UK hardly even noticed the change.”

However Mr Rubinsohn believes a return to the status quo “will be of benefit to no one” and urges the Government to introduce a “wholesale restructuring” of the duty.

He explains: “Specifically RICS favours moving from the current slab structure to a marginal system with no homebuyer paying anything on the first £150,000 of their new home.”

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