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Stamp Duty 'holiday.' Will it happen?

publication date: Aug 18, 2008
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author/source: Peter Bolton King
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What started with the Chancellor, Alistair Darling, responding to an article in the Sun concerning a possible Stamp Duty ‘Holiday’ led, last month, to a political row and media frenzy. 

Whilst there has been speculation that the idea was “floated” to test opinion, or whether, as some have suggested, it was leaked by Number 10 is, frankly, irrelevant. The result was an immediate reaction by consumers who, naturally enough, immediately wondered whether they should wait rather than buy now. 

Various additional comments and appearances by The Chancellor, Treasury, Housing Minister Caroline Flint and the Prime Minister himself, failed to dampen the speculation. Within 24 hours I was receiving numerous calls from members asking me to do something to get the Chancellor to end the speculation. 

To be fair to him he neither confirmed nor denied the possibility of a Stamp Duty Holiday but this problem could have been avoided if he had just said that he hadn’t decided anything. By leaving the possibility open consumers were bound to react and Back Bench Labour MPs were reportedly furious over the story’s handling. 

By wading in, there was clearly a risk that we could be accused of making matters worse. However the President and I felt that, as the Chancellor had already caused the damage, we may as well put forward the NAEA view...

The need to make comment was further highlighted by the fact that the Housing Minister started to accuse agents of “hyping the situation” although I had pointed out that this was the last thing agents would want to do bearing in mind the current state of the market. 

During the week, the media attention increased and in order to counter the “hype” accusation and prove that there was more than just anecdotal evidence we decided to poll members via an electronic survey. 

Within an hour we had received 300 responses and over 1200 within 24 hours. After four days we closed the survey having received a staggering response of nearly 1400. 

This is the largest response ever received to one of our surveys and it clearly demonstrated the real concern members had over the Chancellor’s comments. 

  • 75% of respondents stated that their applicants had questioned whether they should now wait to see what the Chancellor was going to do.
  • 62% stated that current purchasers were now questioning whether they should still go ahead.
  • Most worryingly 25% said that they at least one sale had fallen through as a direct result of the remarks.
  • 92% said that the Chancellor had increased consumers concerns. 

Bearing in mind that 97% of respondents clearly indicated that they wanted the NAEA to publicly keep the pressure on the Chancellor to make a statement now rather than wait until the Pre-Budget Statement, we released details of the survey to the BBC TV. As a result the NAEA was the second story, on the Saturday evening’s news, following the events in Georgia and appeared every half hour on News 24. The story was picked up by all the mainstream papers and as I write this continues to run. 

The emails that we have sent to the Chancellor and Housing Minister suggesting a meeting have to date been ignored. In these we pointed out that an urgent statement was required and that any decision had to be announced immediately to not only end the speculation but to stop any possibility of causing a market distortion such as that seen when the end to MIRAS was announced in advance of the actual date. 

I was, however, asked to meet the Leader of the Opposition, David Cameron MP and Philip Hammond, the Shadow Chief Secretary to the Treasury. 

At this meeting I went through the effect the Chancellor’s comments have had and the general problems with the property market together with a wish list of possible solutions. 

At the same time I was able to briefly talk about HIPs, the buying and selling process and other matters such as problems with the planning system and the control of agents. 

The Conservatives clearly believe that the Chancellor has handled the situation very badly and are intending to push for a position statement. In any case it was a good opportunity for us to meet with some senior members of the Opposition party. 

Hopefully by the time you read this the Chancellor will have resolved this problem as we will otherwise still be battling on behalf of members.