A stamp duty holiday is just what the housing market needs right now - right? Our research team did a deeper-dive into what it’d actually mean in practice - THREAD:

Effectively reducing the stamp duty threshold to zero for many will mean more buyers are encouraged to move home. The ‘holiday’ aspect makes the need for them to do so all-the-more immediate.

But it’s not just about sales transactions. Home-movers investing in their property - renovating, furnishing, gardening - means big business for retail, which will desperately need any leg-up it can get.

So far, so simple. But how have stamp duty holidays worked in practice? One in 1991 raised the threshold to five times the average property prices at the time. Transactions still declined in 1992 - but undoubtedly less so than without the stamp duty holiday.

What’s different today is the regional dimension. Many buyers in northern England and Northern Ireland would see no change from a stamp duty holiday, with transactions under £300k exempt already since 2017 - still way above average local prices.

However, the burden in the south-east of England is still high: the average stamp duty bill in London is £21,000 and the region accounted for 72% of all stamp duty receipts in 2018/19.

But while the benefits would be regional on paper, we all know the property market isn’t siloed. More activity in one region will invariably spillover into others.

Any stamp duty holiday would also work best in tandem with a review of the Help to Buy scheme and increased access to lending. These factors combined will allow the network effect of the housing market to help crank up economic activity in challenging times.

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