Stamp Duty cut more than cancelled out by turbo-charged house price increase for homebuyers, say Labour

Wednesday, 30 June 2021 22:30

Ahead of changes to the stamp duty holiday today (Thursday 1st July) Labour has accused the government of having the wrong priorities on housing pushing the dream of homeownership further out of reach for many. Labour’s Shadow Housing Secretary Lucy Powell has accused Ministers of a failed approach to housing, highlighting that homeownership is down after a decade of Conservative government, and that Ministers’ lack of focus on fundamentally addressing affordability is...Request free trial

Ahead of changes to the stamp duty holiday today (Thursday 1^st July) Labour has accused the government of having the wrong priorities on housing pushing the dream of homeownership further out of reach for many.

Labour’s Shadow Housing Secretary Lucy Powell has accused Ministers of a failed approach to housing, highlighting that homeownership is down after a decade of Conservative government, and that Ministers’ lack of focus on fundamentally addressing affordability is fuelling the housing crisis many face.

Average house prices in England have rocketed in the last year, by 9 per-cent, or £21,956, according to the latest official ONS figures. Analysis shows that the £3419 savings from stamp duty for the average house are dwarfed by these sky-high increases. With Nationwide illustrating this week that prices have risen 13.4% in the year to June, at their fasted pace in 17 years, these savings could be even smaller.

Even on a conservative estimate, on the basis of turbo-charged house prices first time buyers are paying an extra £18,537 for their first home compared to this time last year. In some regions outside London, the difference is, on average, even higher. First time buyers in the North East and West Midlands have to find an extra £20,000, with those in Yorkshire and Humber, the North West, and South West amongst the hardest hit.

Labour’s Shadow Housing Secretary Lucy Powell MP said:

“First time buyers have been further squeezed out of the housing market by the government’s failed approach, which has turbo charged an already buoyant housing market that had pent up demand even before the stamp duty holiday was introduced.

“They’ve given a huge tax break to the housing sector without addressing the fundamental issues of affordability. As a result, the dream of homeownership is now even further out of reach for first time buyers who are now priced out of the market. Ten years of a Conservative Government with the wrong priorities, has failed to tackle the housing emergency.”

Ends

Notes to Editors

House price data is from the latest official ONS release and we have used the government online stamp duty calculator to ascertain the cost of stamp duty on today’s property prices before the holiday was in effect. This shows the savings that buyers could make on average today.

The table shows that any savings on stamp duty are dwarfed by the increased cost of house prices as a result of the stamp duty holiday, and other factors like pent up demand, and the pandemic meaning people are reassessing their housing situations.


Regional house price comparison: April 2020-2021

	Average house price (£)		Absolute increase (£)	% increase	Stamp Duty to pay	Extra cost
Region	April 2020	April 2021	Absolute increase (£)	% increase	Stamp Duty to pay	Extra cost
East Midlands	195,185	213,308	18,123	9%	£1,766	£16,357.47
East of England	290,593	313,964	23,372	8%	£5,968	£17,403.59
London	476,159	491,687	15,527	3%	£14,584	£943.45
North East	123,222	144,032	20,810	17%	£380	£20,429.86
North West	163,904	183,299	19,395	12%	£1,165	£18,229.66
South East	325,154	341,358	16,204	5%	£7,067	£9,136.95
South West	256,514	279,951	23,437	9%	£3,997	£19,439.87
West Midlands	195,075	216,973	21,898	11%	£1,839	£20,059.16
Yorkshire and The Humber	160,140	179,408	19,268	12%	£1,088	£18,179.53
England	246,424	268,380	21,956	9%	£3,419	£18,536.56

https://www.gov.uk/government/statistics/uk-house-price-index-england-april-2021/uk-house-price-index-england-april-2021#price-change

https://www.tax.service.gov.uk/calculate-stamp-duty-land-tax/#/intro

Nationwide reported on Tuesday 29^th June that house prices have risen at the fastest pace in 17 years, up 13.4 per-cent in the year to June. https://www.bbc.com/news/business-57648935

Failure on home-ownership

There are 774,000 fewer home owning households aged under-45 than when Labour left office in 2010.

English Housing Survey 2019 to 2020: headline report, MHCLG, December 2020, https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/899857/2018-19_EHS_Headline_Report_Section_1_Households_Annex_Tables_FINAL.xlsb.xlsx

The overall rate of home-ownership has fallen since 2009-10 from 67.4% to 64.6% in 2018-19.

The government’s stamp duty holiday also allowed second homeowners and landlords to access the scheme, in contrast to Labour’s scheme in 2008 which did not.