Is Stamp Duty Holiday required to preserve Residential Market?

As one of Scotland’s largest independent firms of Chartered Surveyors we welcome the proposal from the Royal Institution of Chartered Surveyors (RICS) that Government intervention will be required to stimulate the property market post Covid-19 lockdown.

The RICS March 2020 – UK Residential Market Survey showed a reversal to the first two months of the year, when strong market conditions were reported.  We are now effectively on pause and a potential drop in values over the next 12 months is predicted as the country and economy recover from the Covid-19 lockdown.

Here is a link to our latest survey from March 2020 – UK Residential Market Survey featuring a quote from our Fergus Mair, Director of Residential in our Edinburgh office.

Hew Edgar, RICS head of government relations said: “RICS is not an organisation that would call for a stamp duty holiday on a whim. As we start to emerge from this crisis, however, it is likely that the finances of potential homebuyers will be under strain, and the burden of stamp duty could put buyers off. For those who can afford to move they may lack confidence in the market, adding to the slow down. A stamp duty holiday could be one of the ways to reactivate the housing market quickly as a short-term measure.”

Simon Rubinsohn, chief economist at the RICS, said: “The results of the latest RICS survey capture the period during which the economy moved into lockdown so show a somewhat mixed picture. But critically, the key forward looking indicators clearly reflect the emergency measures in place”

“The fact that responses are negative not just at the three but also the twelve month time horizon is significant in suggesting that the legacy of covid-19 could be such that any return to what might be described as “normality” in the economy will take time and households will remain cautious for a while.”

Graham Tonner, Head of Residential at G+S comments “A LBTT (Stamp Duty) holiday would certainly help kick start the Residential market in Scotland and any intervention by the UK Govt should be mirrored by the Scottish Government. For the market to recover quickly assistance such as this will be required together with an expansion of the Help to Buy Scheme for the new build market.”

For more information about Residential property please contact our Graham Tonner.