The initial Stamp Duty Holiday which came to an end in March (24th March 2012), although appearing to give the UK housing market a boost, according to HMRC research only increased FTB purchases by around 2%. Market commentators are now suggesting that a change to the rates charged based on the marginal value above each threshold would be fairer to consumers and not distort house prices around each threshold.
This attitude reflects earlier concerns from Avelo Exchange users. When asked in February for their thoughts on the stamp duty holiday coming to an end. The overwhelming response was that it would have a negative impact on the housing market, with one third (32%) believing it would create a major hurdle for first time buyers and almost half (49%) of those surveyed stating that it would make it more difficult for first time buyers.
In terms of other key concerns, more than one quarter (28%) of advisers surveyed, thought the Budget should focus on supporting small businesses. This can be achieved by providing small business owners and start-ups with enhanced access to credit and funds, with just over one fifth (23%) of advisers questioned sharing this belief.
Finally, in a bid to trigger growth, one in five (20%) feel that the government should take active steps to stimulate consumer spending. In 2012 consumers helped propel the U.K. economy out of recession as the London Olympics and a post-Jubilee “bounce” saw household spending increase. However, persuading the financially pressed consumer, to spend money in 2013 could prove difficult. One third (30%) of advisers therefore called for VAT to remain the same.
Paul Yates, Strategy and Product Development Director, Avelo, commented:
“With the threat of a triple-dip recession looming, hopes for the coming Budget announcement to provide a definitive solution to our economic woes are high. Our latest poll gives us a clear steer on the overall sentiment of the adviser community – and judging from their response, the clear call is for the Government to take active steps to embrace growth. Obviously, this is not an easy fix and further measures must be taken to get the UK economy back on track but, our sample is clear: deficit reduction is not enough.”
