{"id":116557,"date":"2022-12-15T17:00:28","date_gmt":"2022-12-15T17:00:28","guid":{"rendered":"https:\/\/www.pbctoday.co.uk\/news\/?p=116557"},"modified":"2022-12-15T17:05:53","modified_gmt":"2022-12-15T17:05:53","slug":"stamp-duty-cuts-affordability-and-the-housing-crisis","status":"publish","type":"post","link":"https:\/\/www.pbctoday.co.uk\/news\/planning-construction-news\/stamp-duty-cuts-affordability-and-the-housing-crisis\/116557\/","title":{"rendered":"Stamp duty cuts, affordability, and the housing crisis"},"content":{"rendered":"<h2>The government stamp duty cuts need to be in conjunction with supply-side interventions, argues Grant Westall-Reece, partner in residential development at Bidwells<\/h2>\n<p>Last month\u2019s fiscal announcement was anything but mini. Since the new chancellor, now dubbed \u201cKami-Kwasi\u201d by some, gave his statement, the pound tumbled, the Bank of England has had to step in to stop a run on pension funds and thousands of mortgage products have been removed from the market. One policy that has fallen under particular scrutiny has been the <a href=\"https:\/\/www.pbctoday.co.uk\/news\/planning-construction-news\/industry-reacts-to-liz-truss-stamp-duty-tax-cut\/115800\/\" target=\"_blank\" rel=\"noopener noreferrer\">stamp duty land tax (SDLT) cuts<\/a>, which has raised the threshold at which duty is paid on homes from \u00a3125,000 to \u00a3250,000, or from \u00a3300,000 to \u00a3425,000 for first-time buyers.<\/p>\n<h3>The stamp duty cuts could boost housebuilding and moving through reduced costs<\/h3>\n<p>Most agree that the tax cut will stimulate the <a href=\"https:\/\/www.pbctoday.co.uk\/news\/planning-construction-news\/will-the-housing-market-crash-in-2022\/114476\/\" target=\"_blank\" rel=\"noopener noreferrer\">housing market<\/a> and generate greater economic activity. In the UK, the number of houses built correlates strongly with the number of times people sell houses: a lively housing market indicates to housebuilders that should they build a property, they are likely to sell it, thus giving housing supply a much-needed boost. The latest research by Alliance Fund indicates that stamp duty cuts could help new housing delivery by 16% across England.<\/p>\n<p>Reducing the cost of moving would also encourage older homeowners to downsize. Across England, there are over 3.653m homes owned by over-65s that have at least two spare bedrooms; reducing the cost of moving means that policymakers can incentivise the freeing up of such stock.<\/p>\n<h3>Unprecedented economic conditions make the market\u2019s response harder to predict<\/h3>\n<p>Though the theoretical justification is strong, SDLT cuts do not necessarily always work in practice as its success depends on a multitude of other factors. Back in 2020, temporarily reduced SDLT rates issued by then-chancellor Rishi Sunak did not have the desired effect. House prices across the UK continued to skyrocket, increasing by almost 21% between July 2020 and July 2022 &#8211; in turn completely offsetting the would-be savings buyers would achieve by not having to pay the tax.<\/p>\n<p>Now, with such a volatile economic backdrop, it\u2019s uncertain how the market will respond to such changes. This is the first time that stamp duty intervention has been done when interest rates look to be rising and the result remains to be seen. On 26 September, the Bank of England announced that it would \u201cnot hesitate to change interest rates by as much as needed\u201d, meaning that the SDLT cut may, at best, only cancel out the costs of soaring mortgage rates and ever-increasing house prices.<\/p>\n<h3><a href=\"https:\/\/www.pbctoday.co.uk\/news\/mmc-news\/cornwall-housing-crisis\/105525\/\" target=\"_blank\" rel=\"noopener noreferrer\">Longer-term solutions to the housing crisis<\/a> must be considered<\/h3>\n<p>It\u2019s clear that demand-side solutions need to be placed in conjunction with supply-side solutions if housing affordability is to see any improvement. In isolation, the stamp duty land tax cuts are only a temporary fix that fails to address the systemic issue that is the UK\u2019s housing demand\/supply imbalance.<\/p>\n<p>While the government\u2019s introduction of Investment Zones across the UK goes some way to addressing this, incentivising developers to build, it does not go far enough. A more targeted approach that frees up existing stock and encourages builders to increase output will also be needed if policymakers want to appropriately address the huge supply and demand mismatch that exists in the housing market.<\/p>\n<p>&nbsp;<\/p>\n<p><strong>Grant Westall-Reece<\/strong><\/p>\n<figure id=\"attachment_116561\" aria-describedby=\"caption-attachment-116561\" style=\"width: 200px\" class=\"wp-caption alignright\"><img loading=\"lazy\" decoding=\"async\" class=\"size-medium wp-image-116561\" src=\"https:\/\/www.pbctoday.co.uk\/news\/wp-content\/uploads\/2022\/10\/Grant-Westall-Reece-200x300.jpg\" alt=\"Grant Westall-Reece\" width=\"200\" height=\"300\" srcset=\"https:\/\/www.pbctoday.co.uk\/news\/wp-content\/uploads\/2022\/10\/Grant-Westall-Reece-200x300.jpg 200w, https:\/\/www.pbctoday.co.uk\/news\/wp-content\/uploads\/2022\/10\/Grant-Westall-Reece-768x1152.jpg 768w, https:\/\/www.pbctoday.co.uk\/news\/wp-content\/uploads\/2022\/10\/Grant-Westall-Reece-683x1024.jpg 683w, https:\/\/www.pbctoday.co.uk\/news\/wp-content\/uploads\/2022\/10\/Grant-Westall-Reece-696x1044.jpg 696w, https:\/\/www.pbctoday.co.uk\/news\/wp-content\/uploads\/2022\/10\/Grant-Westall-Reece-1068x1602.jpg 1068w, https:\/\/www.pbctoday.co.uk\/news\/wp-content\/uploads\/2022\/10\/Grant-Westall-Reece-280x420.jpg 280w, https:\/\/www.pbctoday.co.uk\/news\/wp-content\/uploads\/2022\/10\/Grant-Westall-Reece.jpg 1333w\" sizes=\"auto, (max-width: 200px) 100vw, 200px\" \/><figcaption id=\"caption-attachment-116561\" class=\"wp-caption-text\">Grant Westall-Reece<\/figcaption><\/figure>\n<p>Partner in residential development<\/p>\n<p><a href=\"http:\/\/www.bidwells.co.uk\" target=\"_blank\" rel=\"noopener noreferrer\">Bidwells<\/a><\/p>\n<p>Tel: +44 (0)1865 987541<\/p>\n<p><a href=\"https:\/\/twitter.com\/Bidwells\" target=\"_blank\" rel=\"noopener noreferrer\">Twitter<\/a><\/p>\n<p><a href=\"https:\/\/www.linkedin.com\/company\/bidwells\/\" target=\"_blank\" rel=\"noopener noreferrer\">Linkedin<\/a><\/p>\n<p><a href=\"https:\/\/www.facebook.com\/Bidwells\" target=\"_blank\" rel=\"noopener noreferrer\">Facebook<\/a><\/p>\n<p><a href=\"https:\/\/www.youtube.com\/channel\/UCr9t1VnKflIpK0nnLXiBEOg\" target=\"_blank\" rel=\"noopener noreferrer\">Youtube<\/a><\/p>\n<p><a href=\"https:\/\/www.instagram.com\/bidwellsllp\/\" target=\"_blank\" rel=\"noopener noreferrer\">Instagram<\/a><\/p>\n<div class=\"mk-custom-module-container\">\n<\/div>","protected":false},"excerpt":{"rendered":"<p>The government stamp duty cuts need to be in conjunction with supply-side interventions, argues Grant Westall-Reece, partner in residential development at Bidwells.<\/p>\n","protected":false},"author":17,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[304],"tags":[908,283,276,571,155271],"stakeholder_rel_tag":[],"contributor_rel_tag":[],"class_list":{"0":"post-116557","1":"post","2":"type-post","3":"status-publish","4":"format-standard","6":"category-planning-construction-news","7":"tag-economy","8":"tag-finance","9":"tag-government","10":"tag-housing-crisis","11":"tag-pbc-today-november-2022"},"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v26.9 (Yoast SEO v26.9) - https:\/\/yoast.com\/product\/yoast-seo-premium-wordpress\/ -->\n<title>Stamp duty cuts, affordability, and the housing crisis<\/title>\n<meta name=\"description\" content=\"The stamp duty cuts need to be in conjunction with supply-side interventions, argues Grant Westall-Reece, partner in residential development at Bidwells\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.pbctoday.co.uk\/news\/planning-construction-news\/stamp-duty-cuts-affordability-and-the-housing-crisis\/116557\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Stamp duty cuts, affordability, and the housing crisis\" \/>\n<meta property=\"og:description\" content=\"The stamp duty cuts need to be in conjunction with supply-side interventions, argues Grant Westall-Reece, partner in residential development at Bidwells\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.pbctoday.co.uk\/news\/planning-construction-news\/stamp-duty-cuts-affordability-and-the-housing-crisis\/116557\/\" \/>\n<meta property=\"og:site_name\" content=\"Planning, Building &amp; 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