Thanks to stamp duty 146,000 transactions never happened

Ryan Bembridge

November 15, 2017

Around 146,000 more property transactions would have taken place in the past five years if stamp duty wasn’t in place, Santander has estimated.

The bank added that without the tax there would be more incentive to build by making it more profitable for developers.

Currently 63% of the UK’s property wealth is owned by over-55s, with a typical wealth of £161,000.

Contrastingly 25-34 year olds have an average wealth of £3,000.

Stamp duty inhibits the incentive to relocate, the report added, reducing the ability of people to react to changes in economic conditions in different areas.

The report is called ‘An examination of residential Stamp Duty Land Tax’ and is the second about the tax in two days after Family Building Society looked at whether the government should rethink the tax yesterday.

Miguel Sard, managing director of Mortgages, Santander UK, said: “The report highlights the unintended consequences of stamp duty.

“First-time buyers struggle to get on the ladder, young families want to move up it and the elderly want to downsize, but all are stifled by stamp duty.

“Those aged between 65 and 74 have the greatest average property wealth in this country, and youths have the least.

“The housing market needs to allow for adjustments in demographics to be mirrored by the supply of accommodation.”

Christian Jaccarini, economist at the Centre for Economics and Business Research, said: “While the under-supply of housing has rightly received much attention, our research shows that stamp duty significantly impedes housing transactions, meaning that we don’t maximise the benefit from the existing housing stock.

“In fact, we estimate that 146,000 more transactions would have taken place in the five years to June 2017 if stamp duty was removed entirely.

“The Chancellor should seize this opportunity and make stamp duty reform a priority at the upcoming Autumn Budget.”

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