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'Negative impact' of stamp duty indecision

Wednesday, 13 August 2008 12:00 AM

The government's failure to quell speculation over a potential 'stamp duty holiday' is making a "negative impact" on the UK property market according to a leading estate agent.

London based agent Cluttons argues Alistair Darling's failure to clearly state the future of the unpopular tax is forcing buyers to suspend transactions as they wait for the issue to be resolved.

"The lack of immediate, decisive action from the Government following last week's speculation surrounding the possible scrapping of stamp duty is already having a negative impact on the housing market," explained James Hyman, partner for residential sales at Cluttons.

The furore started earlier this month when the Treasury leaked documents to the Sun newspaper mooting a potential suspension of stamp duty in order to stimulate the housing market.

However, observers have since warned the continued uncertainty is likely to deter buyers who stand to lose thousands of pounds acquiring a property only to see the suspension come into force with the pre-Budget report.

The Treasury has since moved to end rumours swirling around the issue - releasing a statement claiming any potential suspension of the tax was "simply wrong".

Yet both the chancellor and housing minister Caroline Flint have been less direct, stating the government was considering a "range of options".

"We warned implementation of a stamp duty suspension would need to be pushed through straight away if it was to be successful and avoid bringing further stagnation to the market," continued Mr Hyman.

"The possibility of avoiding this tax is too appealing to home buyers, who are reluctant to fork out tens of thousands of pounds for something they may be able to bypass in a matter of weeks, and as a result some buyers are stalling."

Cluttons are now calling for action on the matter, with Mr Hyman concluding: "I urge the Government to either implement this policy now or quash these rumours to avoid exacerbating things further."

Chris O'Toole

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