Uncertainty over the future of stamp duty is having a distorting effect on the housing market, with some sellers wavering over agreed deals, a survey of estate agents has found.
Just days after rumours circulated over the future of stamp duty, agents contacted by The Independent said they were being asked about the situation by confused and worried clients. Some agents said sellers had already decided to put any deals on hold until the Government had made clear its plans.
Agents warned that first-time buyers purchasing cheaper properties could be the worst hit sector of the market, as buyers of larger houses were more willing to pay stamp duty.
They urged the Government to clear up the uncertainty as soon as possible to minimise the disruption caused to the housing market.
Bambos Hatsimeletiou, of Bairstow Eves Countrywide, said: "Just this morning, we have seen the first signs that movers are being affected. We have had two buy-to-let investors telling us they will be putting any housing investments on hold while the situation on stamp duty remains uncertain."
He added: "The longer it drags on, the worse the market is likely to be affected. The Government need to make a decision on duty one way or another, and as soon as possible."
Bruce Collinson, a partner at Adair Paxton, Leeds, said: "People who were previously seriously interested in properties have said this week that they are thinking of pulling out of sales. The number of inquiries has dropped off noticeably."
Russell Jervis, managing director of Haart estate agents, said the introduction of a "stamp duty holiday" would provide much-needed relief for homebuyers, but he warned that the uncertainty was affecting business.
"Transaction levels are down 50 per cent compared to this time last year and the property industry is on its knees," he said.
"The Government must take action now. If speculation of the stamp duty break continues to rumble on, then the current dire situation will become a lot worse."
Richard Hair, who runs an estate agency at Leigh-on-Sea, Essex, said one deal was put in jeopardy this week when a client wanted the price of one property worth £280,000 reduced by 3 per cent to cover the cost of stamp duty.
Graham Robinson of Bryan Davies and Associates, which covers Llandudno and Colwyn Bay, said buyers and sellers had been phoning all week expressing concerns over stamp duty. "We currently have one chain which has £53,000 of stamp duty in it," he said. "We've had a huge response for a very worried public – people can't wait indefinitely for an answer. Over the last few days, the number of inquiries we have had about properties has just died."
Gaynor Davies, manager of Gascoigne-Pees estate agents in Chelsea, west London, warned that first-time buyers could be the most vulnerable.
She explained: "It is also likely to have the most effect on smaller homes, rather than those properties worth over £500,000 where movers are more able to tolerate stamp duty."Reuse content