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How Stamp Duty Cuts Benefit The New Build Markets

How Stamp Duty Cuts Benefit The New Build Markets

by Kos
2 minutes

The recent Stamp Duty cut drivers an increase in property market activity across all major sectors, including new-build properties.

While the benefits of the new stamp duty thresholds are evident across the market, the new build sector might enjoy a more favourable boost than many expect.

The new analysis by Alliance Fund shows that the tax cut is to increase the new build stock levels across England by 16%. Moreover, new-build developments in London might see a staggering 23% uplift.

Researchers based the analysis on the impact of the original stamp duty holiday in 2021. They compared how the new build market reacted to the tax relief with the data from the prior five quarters.

Stamp Duty And New Builds Trends

Between Q3 2020 and Q3 2021, a total of 220,530 new homes entered the market across England. It is a 16% increase (31,000 new builds) against the numbers between Q2 2019 and Q2 2020.

The East Midlands saw a significant uplift in new build stock levels during the stamp duty holiday in 2021, with the numbers rising by 20%. The North West and North East come next, with similar figures reaching 18%.

New Builds In London

Perhaps surprisingly, new-build homes in London outperformed other markets across the country in the number of added new build stock during the stamp duty holiday.

The market saw a notable 23% boost (5,560 more new homes) in completions against the prior five quarters before the tax relief.

Specialists Add

Alliance Fund highlights the benefits of the tax cut for the property market and suggests that we might see a solid boost in the new build sector stock levels. The savings don't apply to developers, but it is still beneficial. The tax cut will improve the market sentiments and help housebuilders ride this new wave of new build market activity.

In 2021, we saw how the tax holiday boosted market activity, including demand and supply. As a result, experts anticipate similar trends in late 2022 and beyond in the new build property market in London and England.

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