Slashing stamp duty without property market reforms 'will push up house prices and demand'

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Slashing stamp duty without property market reforms 'will push up house prices and demand' 🔴 ChaplainChloe RichardVaughan1 reports.

“But without Council Tax reform, the asset-rich benefit the most and the system will become even more regressive,” the campaign group warned. “A Proportional Property Tax would make things simpler and fairer.”

Sarah Coles, a senior personal finance analyst at Hargreaves Lansdown, said potential cuts to stamp duty may risk “doing more harm than good”. She said stimulating housing market demand could push house prices up further, at a time when the supply of available homes is already tight andMs Coles said: “You can see why the Government is concerned about the housing market, because there’s a risk that rising mortgage rates and rising prices will dampen buyer enthusiasm. We know from recent experience that a stamp duty holiday effectively stimulates demand.

“No buyer will ever complain about a tax cut, but if the Government was to cut stamp duty it would mean ignoring the fact that the real brake on the property market is a severe shortage of supply. “Stimulating demand without addressing supply problems would risk more buyers chasing a tiny number of properties, which would push prices up. It’s what we saw during the coronavirus-inspired stamp duty holiday.”

 

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