Impact of the Covid-19 pandemic on UK economic growth and business activity is undeniable, but the stimulus measures announced today will be key to boosting the housing market through the current downturn.
Stamp duty holiday
Government policy support is of absolute importance in limiting the economic impact of Covid-19 on the housing market in the UK. The stamp duty holiday until 31st March 2021 for homes up to £500,000 could prove to be a key incentive to kickstart the housing market and make up for lost sales. There is a lot of pent up demand for new homes in the UK – our research shows more people are now looking to move home in the next two years. This stimulus could trigger a stronger than anticipated bounce in demand by allowing aspiring purchasers to use their stamp duty saving towards a higher deposit.
The Government has a recent track record of making stamp duty changes to help those on the earlier stages of the housing ladder such as first time buyers. Looking forward we would also encourage the Government to consider stamp duty incentives for older people to downsize or right size their homes. There is strong evidence to show that those over the age of 65 simply do not move until such a time as it becomes a necessity, such as needing care. However, over the next 10 years around 25% of the UK population will be over the age of 65. Encouraging these people to move into age appropriate homes would free up much needed housing at the other end of the housing ladder.
The green recovery
Assisting households with making energy-efficient home improvements will lead to lower energy bills, create job opportunities all over the country and is an important initiative to help deliver a low carbon future for the UK. But the Government still needs to lay out the full roadmap to decarbonise all homes across the UK, and it must take responsibility to educate the public that living in a low carbon home is both inherently desirable and an absolute necessity to meet our climate change goals.
Nick Whitten - Head of UK Living Research