Stamp duty reforms could boost UK building

Stamp duty reforms could boost UK building

The changes to the way stamp duty is calculated in the UK housing sector could see building work pick up in the next 12 months, according to the latest report from one of the country's biggest builders. 

At the start of December, chancellor George Osborne said that stamp duty will now be calculated proportionately, in the same way as income tax, as opposed to the flat rate that it fell under in the past. 
This move was immediately welcomed with open arms, as it should help get more people onto the property ladder, but according to housing developer Crest Nicholson, it should also help to address the supply and demand issue somewhat by encouraging more and more builders back onto sites. 

The company said that since the announcement of the change to the way calculations are made, it has already decided to start work in Southampton, where it will construct some 280 new homes across the course of the next few months. It added that 128 of these are guaranteed to be erected in 2015. 

The reason for this is simple - builders can see the saving that buyers will make when getting themselves a home under the new laws, and have estimated that this will increase the number of people looking to buy as a result. 

Crest Nicholson believes that the number of people coming to market will grow by 44 per cent in the south of the country as the average buyer should be in line to save themselves £1,600 on stamp duty compared to what it would have cost them under the old scheme. 

Home Builders Federation executive chairman Stewart Basley agrees with this opinion, saying: "The slab system also did wider economic damage because it impeded labour mobility. Whilst we need to study the overall impact of the proposed changes the new system, which will benefit 98 per cent of home buyers, is fairer and more practical and will help stimulate activity in the housing market, as well as helping to boost the production of new homes."