The Money Stop

Over recent months the housing market in the UK has experienced a real slump, with house prices falling and property sales falling to their lowest level in many years. Property sales and housing transactions have been affected in a number of ways over recent months and for a number of reasons. The tight credit conditions that have come into play since the onset of the global credit crunch have resulted in more people being unable to get a mortgage. In addition to this falling house prices have put many people off taking the plunge for fear of house prices falling further and leaving them quickly facing negative equity.

According to recent reports another factor is also now affecting the level of property sales in the UK, causing a further slump in the number of properties being sold. This is in connection to stamp duty, and follows a suggestion from the chancellor, Alistair Darling, that the government may be looking at suspending stamp duty for first time buyers that are purchasing a property of up to £250,000 in value, and that this may happen in the autumn.

With stamp duty often amounting to thousands of pounds, many first time buyers that may have been looking to buy seem to have now decided to wait it out in the hope that they could save money later in the year if stamp duty costs are suspended. Some have reported that even many of those that had already put in offers on property backed out after Darling indicated that stamp duty might be suspended.

This has caused a further slowdown in property sales, and one consumer speaking about Darling’s speech stated: ‘If he is going to suspend Stamp duty it has to be done right away. If he hints it will be announced in an October budget then the market will die completely until then.’

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