Knight Frank: Stamp duty holiday would stimulate post-lockdown economy
To ensure the UK’s housing market is kick-started once the COVID-19 lockdown ends, estate agent Knight Frank recommends the government implement a stamp duty holiday.
This is just one of five key measures proposed by the firm, one of which is extending Help to Buy.
Liam Bailey, global head of research at Knight Frank, said: “Despite the fact the government will forgo a significant amount of stamp duty revenue in 2020, it seems clear there will need to be a stamp duty holiday to actually get the market moving once the lockdown is lifted, but this move alone will not be enough – there will need to be moves across a wider number of areas, including an extension to Help to Buy to support first time buyers and support activity across all price bands.”
Knight Frank has suggested that where Help to Buy has helped progress projects in an occasionally slower market, its extension will be welcomed given the anticipated drop in overall transaction volumes in the coming months.
Other measures include reviewing the conveyancing process, introducing virtual planning meetings, and offering greater flexibility around planning obligations, Section 106 and Community Infrastructure Levy (CIL) requirements.
The process of conveyancing and Land Registry searches are simply areas that could be improved and sped up to drive efficiencies, according to Knight Frank.
However, the firm has also said that measures to help stimulate demand should be supported on the supply side.
Oliver Knight, research associate at Knight Frank, said: “Initiatives designed to keep the planning system moving have already been made, with the Coronavirus Bill effectively allowing councils to hold virtual planning meetings, but more can be done.
“An extension of time to implement existing and pending planning permissions, given current barriers to developers starting on sites, would be a start, and one that has the backing of the [Home Builders Federation (HBF)], the trade body for the home building industry.
“There is also a precedent with the government having granted similar temporary powers between 2009 and 2012 following the financial crisis.
“Greater flexibility should also be encouraged with regards to the payment of planning obligations, such as Section 106 and Community Infrastructure Levy (CIL) payments.
“Such outlays are generally paid up-front and – given expected limited cash-flow over the coming months – a move to allow practical staggering or staged payments would be welcome.”