Backgrounder: stamp duty holiday

Will they or won’t they? That’s the question on every home buyer’s mind this morning as they ponder whether the government will finally put their money where their mouths are and announce a suspension/abolition/holiday/reform for stamp duty.

Speculation about whether the government will attempt to reignite the housing market with a reform of stamp duty has been underway for most of August ever since briefing from Number 10 staff that caught Treasury officials and politicians, including the chancellor, on the hop.

As soon as the idea was mooted however, the housing market slowed again as prospective buyers held off from closing sales in case for fear of losing the opportunity of making a saving. Number 10’s now rash looking briefing then attracted much criticism.

Commentators quickly pointed to the efforts of former chancellor Norman Lamont to improve the housing market by fiddling with stamp duty only to see his worthy intentions unrealised.

Others, including estate agents, suffering from a significant drop in sales welcomed the offer with open arms.

Indeed the National Association of Estate Agents said it was necessary for first time buyers.

But the policy carries considerable political risk if it fails to provide the stimulus needed to get the market moving again. Events today will reveal the who is driving the policy, Number 10 or the Treasury, and what the details.