The economic plan, to be unveiled by Chancellor Kwasi Kwarteng on Friday, aims to stimulate further growth in the property market and help more young people buy their first home. Whitehall sources told The Times that stamp duty cuts were the “rabbit” in the mini-budget and government officials had been working on the plans for more than a month. Critics said the move would make the housing crisis “even worse”. Commenting on reports of the stamp duty cut, Lib Dem MP and former party leader Tim Farron tweeted: “How to make Cumbria’s housing crisis even worse: give people an extra incentive to buy homes they don’t need by pushing them even further for those who need them.” It comes as the average UK house price jumped by 15.5% year-on-year in July, the biggest rise in 19 years, according to official figures. The percentage increase was about twice the rate recorded in June, when the typical property value increased by 7.8 percent annually. Former chancellor Rishi Sunak introduced a stamp duty holiday in 2020 in a bid to cushion the property market from the impact of the pandemic. Raising the threshold for paying stamp duty from £125,000 to £500,00 cost the Treasury £6.4bn and economists said the policy did more harm than good for shoppers. While the tax break boosted the number of home sales, experts said any savings for buyers were eroded by increases in home prices, which were pushed higher by the measure. Critics also said the move penalizes first-time buyers by increasing competition and sending property prices further out of reach. George Deeb, head of the Center for Economic Justice at the IPPR think tank, said of Mr Sunak’s policy: “Even before the pandemic, UK house prices were too high for most people – yet the holiday with stamp duty raised prices further. “Getting on the housing ladder is now harder than ever, and those struggling to save for a deposit will be rightly angry that government policies have made it even harder.” Ms Truss has said she is willing to be an unpopular prime minister to take measures she believes will grow the economy, admitting her tax cuts will disproportionately benefit the wealthy. On Tuesday he confirmed he would roll back the rise in national insurance and scrap a planned rise in corporation tax. She also effectively confirmed a plan to scrap the cap on bankers’ bonuses as she argued she must make “tough decisions” as part of her political and economic bid to focus on growth.
