Figures from Hamptons International have revealed that recent Government speculation over stamp duty is having a detrimental effect on the UK housing market with a number of transactions stalling due to buyers hoping for some stamp duty relief.

Analysis from the residential agency reveals that, although a stamp duty holiday rolled out effectively may help consumers, the Government’s current indecision as to whether to introduce this measure or not is having the opposite effect with many customers adopting a wait and see strategy.

Research from across the >Hamptons International network has shown that a number of customers are making a decision to stall until an announcement is made - with some exchanging contracts, but deferring completion dates of September to October, in the hope that they will qualify for the stamp duty saving.

“This speculation on stamp duty is in no way helpful in the current climate,” comments Rob Bruce, Hamptons International. “Just as the sales rate was picking up in late July and exchanges were 13% higher than early 2008, volumes were decimated by the dangling carrot of a stamp duty suspension. During the last week the number of exchanges went down by 17% following three weeks of continual gains.”

Rob Bruce continues, “Moreover the longer the possibility of a change hangs in the balance, the worse the situation will become. If administered effectively this change could allow first-time buyers to supplement their deposit rather than pay stamp duty fees immediately. However, drawn out speculation does not help anyone.”

“Our recommendations would be that the Government lifts the lowest stamp duty threshold to £250,000 in order to kick start the lower end of the market and assist first time buyers,” concludes Rob Bruce.

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