Did Stamp Duty Holiday Cause Surge in Demand on Housing Market

Did Stamp Duty Holiday Cause Surge in Demand on Housing Market

The stamp duty holiday deadline is nearing and will come to a close on 30 September. That means the tax savings to home buyers at property purchase levels of £250,000 or less will disappear. Many believed that the stamp duty holiday was the cause of the surge in demand on the housing market and without it the market will cool down, but that could be off the mark.

While the stamp duty holiday might have been an opportunity to save money, especially when it once benefitted buyers of properties up to £500,000, it is thought by one think tank group to have been a waste as the HMRC lost out on an estimated £4.4 billion in taxes in England and Northern Ireland. The Resolution Foundation believes that it was the lifestyle taken on during the pandemic that caused the strongest demand on the housing market.

Working from home and children learning from home forced a desire for more space. The new pandemic lifestyle which forced people to stay home caused a drive to want and need more green space and outdoor area as well as private areas to work and study. The pandemic itself caused a surge of buying demand.

Not only did renters take notice of the availability of living differently, but so did homeowners of which many became home movers.

Before the pandemic, small homes were desired as they were efficient and less costly to buy and maintain. The need for more space not only caused a shift in desire for the bigger homes that had been ignored for years, but it influenced what areas were most desired as the city no longer held the allure and instead it was the countryside. 

The pandemic might have ignited the shift in lifestyle needs, but it is expected that the shift is going to stick even after the pandemic ends. Therefore, it is less likely that the end of the stamp duty holiday will put off hopeful home buyers. The tax savings was nice, but a spacious home with a lovely private garden in the countryside is nicer.

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