Chancellor Rishi Sunak cut stamp duty by increasing the threshold for the tax to £500,000 today and the industry has been quick to react. 

The change that will last until 31 March 2021 was widely expected and the reaction, as would be expected, has been broadly positive – albeit with caveats.

Lee Chiswell, head of Barclays Mortgages, said it was a boon for the market.

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He said: “We welcome today’s news from the Chancellor. This change will provide a boost for the property market and will help the nation start to move with confidence once again, providing financial and psychological relief to those looking to move into a new property.”

Alan Cleary, managing director of OneSavings Bank, said the change was a positive one but said time would tell when it comes to the health of the market.

He said: “We won’t really know the pandemic’s effects on house prices for many months to come. But what we do know is that the housing market hasn’t experienced these levels of uncertainty for generations.

“Put simply, the government had to step in to keep things ticking along. And now the Chancellor is effectively taking a slice of stamp duty off the plate of would-be buyers and instead giving them a helping of pure bank account bolstering confidence.

“The whole industry will welcome today’s announcement which is practically guaranteed to stimulate activity within the residential market. However, it is worth noting that uncertainty remains in the commercial property market and more will need to be done to keep things moving.”

Phil Bailey, sales director for mortgage tech provider Twenty7Tec, agreed but warned that the increase of the threshold was far from the perfect solution.

He said: “We hope that the housing market will get the stimulus it needs from the Chancellor’s announcement on stamp duty.

“For us to have a housing-led recovery, we need first time buyers in the market and this measure will go some way to helping alleviate the level of funding that they need to get onto the property ladder.

“However, it’s not a perfect solution. There’s a lack of mortgage products in the market in the 90%+ LTV range as lenders have adjusted for their risks and their own lending capacity.

“This means that deposit levels have, effectively, gone from 5% to 15%. Previously, this gap has been filled by the bank of mum and dad, but the last few months have eaten away at their savings and possibly their attitude to taking on new investments. There’s also less housing stock on the market, which means it’s a seller’s market.

“Unfortunately, this stamp duty holiday won’t really help with any of these points. In our view, it’ll drive a surge in demand, but it’s more than likely going to support people to buy bigger than helping those who are struggling to get onto the property ladder. The additional demand caused by this could push house prices up or see them stay the same and not drop as expected later this year.

“Speaking to lenders and intermediaries this week, there were two real worries in the market about this stamp duty announcement.

“First, that it has previously been mooted and not happened so people were questioning if it would happen this time. Second that it might be delayed until later in the year, which would induce an unnecessary halt in a housing-led recovery.

“Thankfully, the current Chancellor is someone who seems capable of getting things done and at pace. We’ll see what the data says about a continued recovery over the next few days and weeks.”

Whilst Islay Robinson, group CEO of Enness Global Mortgages, warned that segments of the market had been ignored.

Robinson said: “The government has mostly ignored the top end of the market in recent years and this has had a detrimental impact on demand and property values in the prime London market, in particular.

“Today has been much of the same and although high-end homebuyers will enjoy some form of discount where stamp duty is concerned, it’s looking unlikely that this will apply to second homes and they certainly won’t be getting any richer thanks to Rishi.

“In fact, this archaic tax continues to leave a bad taste in the mouth of prime buyers who are paying huge sums in addition to the value of their chosen property, and it’s about time this government money grab is abolished altogether.”

Jeremy Duncombe, director of intermediary distribution at Accord Mortgages, said that this was a welcome change but not a quick fix.

He said: “Anything which encourages confidence in the housing market is welcome and for some borrowers, today’s decision will be the catalyst they need to progress with a house move.

“However, raising the limit to £500,000 will not ‘fix’ the market.

“There are a number of other measures which need to be given further thought and consideration by the government to make a longer term difference to those wanting to secure their own home.

“An extension to the current Help to Buy scheme which would allow for more borrowers, both first-time buyers and home movers to take advantage of the scheme would be a real boost to the industry.

“With the deadline for the current scheme looming, the delays to building work caused by the pandemic is threatening to exclude many home movers from accessing the financial support this initiative offers. By acknowledging the situation and adjusting timings accordingly, the government could offer valuable support to both purchasers and the housebuilding sector.

“Likewise, to support more first-time buyers, a review of the current stress testing measures could make the shift from renting to owning more accessible for those who have a proven track record of meeting monthly rental payments.

“Support of any kind is always welcome, but this market is complex with many moving parts. We’re seeing positive signs with strong demand evident in recent weeks, but in order for this to be sustainable, we will need the whole industry to collaborate on a myriad of measures.”

Anna Clare Harper, co-founder of property fund Anglo Residential, added: ‘The stamp duty holiday is great news for buyers and the wider housing market.

“It makes buying properties easier and more affordable. More transactions mean greater liquidity throughout the market as the impact filters up the ladder.

“We would expect this to encourage house-price growth, which in turn will make investors and home buyers more confident about making a move in the near future.”