Stamp collecting

So in everything, do to others what you would have them do to you

Forgive me if this seems like old news, but two things struck me about the Angela Rayner stamp duty situation.

One, that if, whilst in opposition, you bay for the blood of every one of the incumbent government ministers who makes mistakes, or does something that looks dodgy, then you have to make sure that you are squeaky clean yourselves, if and when, you then take their place. If you, for whatever reason, innocent or otherwise, fall short of the high standards you set for everyone else, then you walk. End of story.

Two, that the stamp duty, a tax that has been around for centuries in various forms, is flawed and needs reforming. It’s been tinkered with over the years, especially recently, as governments try to boost housing transactions. All that does, however, is distort things. As soon as any period of stamp duty reduction comes to an end, the market takes a hit as transactions slow up once again.

The problem with stamp duty is that it is a tax paid by those buying a home. A tax on moving. Effectively a tax we pay for the privilege of changing where we live. What happens if you make something too expensive or two complicated to do? People generally, stop doing it. Stamp duty, therefore, sometimes can be a barrier to moving, whether that’s to up-size and create more space for growing families, or down-sizing to something that’s more appropriate for your needs. It means that there is a disincentive to use our housing stock more efficiently.

A personal example. I have an elderly mother who lives on her own in a house that would be extremely suited to a young family. Quite apart for the fact that she loves it there and has no desire to move, the finances for selling up and buying somewhere smaller and more manageable just don’t add up.

The problem with a disincentive like this is that it is not just a barrier to the actual moving, but to all the attendant benefits that a vibrant, active housing market brings. That is, business for removal companies, estate agents, solicitors, conveyancers, new kitchen and bathroom specialist, builders, plumbers, decorators. And, of course, builders and plumbers’ merchants.

The RMI market is the lifeblood of most of the merchants in this sector. It is fuelled by, and sustained by, the level of housing transactions. Anything that limits those transactions limits the business going through this sector and all the firms who rely on it.  That means us. All of us.