The end of the stamp duty holiday at the turn of the year could undermine the recovery of the housing market in Scotland, according to new research from the Royal Institution of Chartered Surveyors (RICS).
RICS said that further analysis of its October housing market survey had revealed that most surveyors in Scotland believed they would see a drop in activity next year following the end, on December 31, of the stamp duty holiday for properties priced between £125,000 and £175,000. The institution said that instead of returning to the “status quo”, the Government should use the opportunity to restructure the entire stamp duty system. It said that while the majority of chartered surveyors were not expecting the reimposition of the tax to distort the housing market, this was because many were in London – where the average house price was well above the stamp duty threshold – or the north of England, where the average price was well below the threshold. However, regions whose average prices sat within the margins would be directly affected, it said, with the average house price in Scotland at around £140,000. RICS chief economist Simon Rubinsohn said that while some areas of the country had hardly even noticed the stamp duty holiday, ending it would have an impact on other areas. He said: “The additional transaction cost is still a worry to many, particularly first-time buyers, and is a threat to the market in the areas of the country that are still seeing a weak price environment. “A return to the status quo will be of benefit to no one, and as such RICS believes that rather than simply reverting to the old structure for stamp duty, the imminent change provides an opportunity for the Government to introduce a wholesale restructuring of the tax. “Specifically RICS favours moving from the current slab structure to a marginal system with no homebuyer paying anything on the first £150,000 of their new home."
