Pressure is ramping up on Chancellor Jeremy Hunt to cut stamp duty at next month’s Budget on March 6.
Former Housing Secretary Robert Jenrick is the latest big hitter amongst politicians to call for dramatic action to spur investment and housebuilding.
In the House of Commons, Jenrick told Prime Minister Rishi Sunak: “A first responsibility for Government is to fix the housing crisis that young people didn’t cause.”
He said the Conservative Party had “dragged housebuilding” to the “highest levels since 1987” and said Labour “left it at its lowest level since the 1920s” but added: “Housebuilding is weakening. We need to do more. Will (the Prime Minister) consider using the budget to do as he and I did together during the pandemic and cut stamp duty to boost housing starts, to reignite the economy and to support thousands of businesses across our country?”
Sunak responded: “Since 2010 we have delivered two and a half million additional homes, on track to deliver a million just in this Parliament and help over 850,000 families into homeownership through schemes such as help-to-buy and right-to-buy. Obviously, tax decisions are a matter for the Chancellor. But I would point out that our existing stamp duty relief for first-time buyers ensures the vast majority of first-time buyers in our country pay absolutely no stamp duty.”
The most recent HNRC figures on the stamp duty revenue will be disappointing for the government: receipts dipped four per cent to £2.4 billion in Q3 of last year - no less than 25 per cent lower than the same period a year earlier.
HMRC data shows that the number of residential property transactions in the fourth quarter of 2023 was in total only one per cent down on the previous quarter although there was a larger dip in the transaction volumes of those homes specifically liable to SDLT.
The Revenue says that stamp duty applied to 89 per cent of all housing transactions in the final three months of last year - slightly below expectations.
Leading analysts have been calling for reform or, possibly, abolition of stamp duty.
The Institute for Fiscal Studies chief, Paul Johnson, says radical changes to stamp duty could invigorate the housing market and contribute to economic recovery.
And the National Residential Landlords Association says the abolition of the three per cent stamp duty surcharge on additional homes could reinvigorate the rental sector. The NRLA argues that this would help meet the rising demand for rental accommodation, as research suggests that there are now 11 potential tenants for every available property.
Possible relief measures the Chancellor could announce at the Budget include adjustments to stamp duty thresholds, rate reductions, or another temporary holiday as Jenrick suggests.
Most analysts say cuts to stamp duty may be easier to achieve