Are we creating a false ceiling? - Comment on the HMRC property transactions for October from Richard Pike at Phoebus Software

24 November 2020

Richard Pike, sales and marketing director at Phoebus Software, says “We have now reached a point where the impetus created by the stamp duty payment holiday has taken property transactions above the level in the same month last year. However, as can be seen by the increase in the receipts from the stamp duty that is still being paid on properties over £500,000, house prices are being pushed up by the demand. The question has to be whether the increase in house prices is sustainable, or even affordable. With the government wanting to get more people onto the property ladder, it appears that what we are creating is a false ceiling that many younger people will once again struggle to break through.

“Affordability, especially when many incomes are suffering due to the pandemic, is a big issue, which could see the housing market stall once the stamp duty holiday is over.”

“The Chancellor’s spending review tomorrow is unlikely to include anything further on housing, but stranger things have happened and, when receipts for stamp duty continue to flood into the treasury, an extension to the payment holiday may be on the cards. Whether that is good for the long term health of the market is another question?”