Stamp duty cuts announced as part of September’s “mini” Budget will remain in place until March 2025, the Chancellor has said.
Jeremy Hunt announced the commitment as part of today’s Autumn Statement.
Changes to nil-rate thresholds will then end on March 31 2025.
From March 2025 the threshold at which stamp duty is paid will drop from £250,000 to £125,000.
Former chancellor Kwasi Kwarteng changed the threshold at which first-time buyers begin to pay stamp duty from £300,000 to £425,000 as part of his “mini” Budget.The maximum value of a property on which first-time buyers’ relief can be claimed also increased from £500,000 to £625,000.
The stamp duty changes were one of the few measures introduced by Kwarteng that Hunt did not reverse when he became chancellor in October.
Commenting on Kwarteng’s “mini” Budget Hunt said: “I understand the motivation of my predecessors mini Budget and he was right to identify growth as a priority”, but he added that “credibility cannot be taken for granted".
HM Treasury said the commitment to keep the measure in place until March 2025 is to “help the jobs & firms that rely on the housing market through the current challenges, while strengthening the public finances in the longer term.”
Industry experts have previously questioned the impact a stamp duty cut will have on the housing market, with some warning that it will stimulate an already overheated market.
Private Finance technical director Chris Sykes said: “Long term reform is needed and would have the least impact on pushing up house prices. A short term holiday would likely push them up.”
Others have said maintaining the stamp duty cut is unlikely to have an impact on the housing market when mortgage interest rates are currently so high.
The reaction by bond markets to September’s “mini” Budget pushed the cost of borrowing higher in the UK, and led to thousands of mortgage products being withdrawn from the market before being returned at higher rates.
The average two-year fixed rate last week (November 11) was 6.33 per cent, falling from 6.46 per cent the week before (November 3) when the Bank of England increased the base rate to 3 per cent.
jane.matthews@ft.com
