Should stamp duty be abolished to help the housing market?

[Dorothyperky]

Nothing is selling in our area over £500k (south).

Every agent near us is seeing less sales and fewer instructions.

Also would it make a difference to you?

So much money is going to be lost in property, that "equity" would have been much better off in other investments.

Houses are unlikely to plummet in value, people are more likely to avoid moving or house prices to stay the same, maybe drop a little, but unlikely to reduce massively in value and they'd be unlikely stay low for more than a few years.
Unless people are forced to sell for unfortunate life circumstances they'll generally sit tight if selling would require a massive hit to their finances

It helps everyone moving house.

At the top end of the market it helps a lot, and this has nothing to do with the overall effect of the stamp duty on prices. To make the same point again, moving from one expensive family home where I live to another one of the same price costs a lot of money in tax, around £250-300,000.

Valuations are based on the houses that actually sell, you can sit tight but the house is still losing value as those who absolutely must sell (Three D"s for example) drop their prices to do so.

The market consensus is that the Fed will raise rates by 50bp over the next eighteen months then cut by 15 over the following year.

In GBP there is a similar set of moves priced in.

These are relatively modest moves, and the expectations that if the situation in the gulf is resolved that at least one of those rate rises will be taken out.

But if the majority of people aren't selling, then that reduces the supply of available houses. Those that want to buy then have a limited options which fuels competition to keep house prices from dropping to very low prices. There isn't an abundance of empty properties in the UK
The prices may drop a little but it will not be significant drops when it does

We were effected by the 2008 crash and people pulled up the drawbridge. The house we were buying disappeared from the market. Many houses did not return to the market for more than a decade. Some houses near us have been on and off the market for years but that tends to be period townhouses with no parking.
A house was reduced yesterday that was in competition with ours and yet I was told it had loads of offers (estate agent was bigging it up to get my instruction). Perhaps the buyers couldn't get the mortgage ? It's now very inexpensive and cheaper than mine which is a worry. Additionally a major much admired listed house in our near market town took a major hair cut today. It's truly beautiful but has not sold in six months. It got reduced by £250k!
I agree with the sentiment that people are skipping rungs of the ladder. Flats are not selling near us unless heavily incentivised.

Everyone viewing a home to buy already lives somewhere, there is no shortage, the factor that decides if they buy another place to live in is how much they can afford or how much they can borrow, it isn"t about supply and demand, there are more properties for sale than people interested in buying them. The "supply and demand" meme was popular during the height of the property credit bubble, it was more about luring people into big mortgage debt than reality though.

https://www.propertywire.com/news/uk/one-million-homes-in-england-left-empty/

Yet people still try to tell us there are not enough houses!

Not everyone looking to buy already has a home they can stay in. People need to move out of their parents homes at some point, some may need to move to start a family, some because they need to move for work. There are people migrating to the uk. They will need to rent or buy. If they aren't buying someone or a company owns the home they are renting.The population is still growing quicker than houses are being built.

Migration isn"t going to save the UK property bubble, people coming over in boats won"t be borrowing the silly amounts needed to bail recent mortgage debt takers out of poor decisions.

https://www.bbc.co.uk/news/live/cvgzjpd1jjgt

Also the 1 million homes empty statistic seems a bit dramatic on the face of it, but it is all houses that aren't in permanent residential use and it's split is below. In the long term empty that could include those being renovated and in the vacated home, short term let houses. Second homes are over 25% of that million
Long-Term Empty: Over 300,000 homes have been empty and unfurnished for six months or more.
Total Vacant Homes: When taking into account all forms of vacancy (short-term, derelict, and empty council/social homes), that figure rises to over 540,000.
Second Homes: There are roughly 268,000 second homes and holiday lets that are not used as primary residences

If population increases then people there will still need to be housing for them whether they buy it themselves or whether they rent from other people/companies or councils/housing associations that do own the properties. Unless the population falls off a cliff then there will be demand for houses. Ons are predicting population rises for the next 30 years or so. Even if it remains largely stable population wise we haven't got an abundance of extra properties

So why does the housing market need "help" from lower SD in that case?

So why is mortgage lending down by a third?

I think the thresholds should be increased to free up the movement of houses, at the moment I think more FTB are holding out in the hope of getting forever home first time round to try to avoid paying thousands in stamp duty further down the line. People who won't downsize if they want to in some cases because they would need to pay huge amounts in stamp duty, people needing to move into bungalows or ground floor flats etc with mobility problems are staying in unsuitable houses for longer than is beneficial because of the financial hit of stamp duty.
The property ladder isn't working as it should, people are basically becoming stuck in various unsuitable levels where they should be moving but can't take that big a hit with each move. Buying and selling property isn't a cheap thing to do with solicitors fees, surveys, moving costs, estate agent fees, but when you add thousands of £s of stamp duty fees on top of that, people will just stick in unsuitable housing for a lot longer. If they lowered the percentages or raised the thresholds this would help

The real reason is that houses are too expensive, people no longer want or can get the level of debt to buy them.

Around here, nice four bedroom detached houses are selling more slowly than in recent years. IMO this is because it's a low wage region, so the buyers tend to be relocating from more expensive areas, with lots of equity and professional salaries, and there are fewer of those wanting to move so far out into a rural area. Pretty cottages have tended to be sold as second/holiday homes and many are going back on the market as double council tax bites.

I mean there are many examples of people on this thread that the only won't move because of the stamp duty

Many on here won"t need big mortgage debt to buy/move, the first layer of the property pyramid is built on FTB, they are not so affected by SD, but they are affected by too high prices and mortgage debt getting more expensive.

FTB are affected though if they hold back from buying a traditional starter home , because they don't want to pay the stamp duty when they would traditionally be wanting to move up to the next property or when they get stuck in that first property because they can't afford the chunk of money for the stamp duty even when they could afford the increased mortgage for the next house

Haven't seen the information on that so not sure what it's referring to, so don't know enough to respond

Yes, although, on the flip side, the families in these other cities won't have anywhere near the income or wealth to be able to buy a house worth 2-3 million. Presumably, you have gained a lot from the rapid gains in London/commuter belt properties and the London incomes.
I do understand your point though and the levels are certainly reducing mobility, which is a bad thing.

Interesting that they are building lots of FTB properties. Are they actually affordable to the FTBs in your area? Are they buying them, I wonder.
It's funny that you say that removing SD is not a long term fix but you then suggest a holiday! A SD holiday would be the worst thing of all. It would be far better to overhaul the whole tax system, reduce tax on productive work (incomes) and introduce a LVT and higher taxes on speculation.

I agree. Pretty, coastal counties like Cornwall, Devon, Suffolk, Norfolk, etc have seen the interest from second home buyers plummet. Prices in a lot of these sort of areas seem to have fallen a great deal as local buyers simply don't have the ££ but still the agents list them far too high and they don't sell.