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OBR Stamp Duty Forecast Called 'Ludicrous' by Experts
8 Mar
Summary
- Property experts deem OBR's £28 billion stamp duty forecast 'ludicrous'.
- Sluggish market conditions and high transaction costs deter house moves.
- Housebuilder Vistry reports a 9% drop in new home completions recently.
The UK's official forecaster, the Office for Budget Responsibility (OBR), has been accused of producing overly optimistic figures regarding stamp duty receipts. Experts have dismissed the OBR's projection of £28 billion by 2031 as 'ludicrous,' suggesting these numbers may flatter the government's financial outlook.
These forecasts are reportedly based on anticipated rising house prices and a rebound in home sales. However, the property market is currently experiencing sluggish conditions, with high stamp duty rates acting as a significant deterrent to buyers and discouraging property transactions.
Adding to the concern is a slowdown in housebuilding, with Vistry, a major developer, reporting a recent 9% decrease in completions. Furthermore, potential increases in mortgage costs due to inflation could further suppress demand, making the OBR's revenue predictions seem increasingly unrealistic.
Experts like Richard Donnell from Zoopla estimate that 1.3 million home sales would be necessary to meet the £28 billion target by 2030, highlighting the scale of the challenge. Additionally, central London is seeing fewer 'trade-up' buyers, impacting potential stamp duty revenue for the Exchequer.
