Written by Tim Grey a Director of multi award-winning family-run housebuilding company Llanmoor Homes, which has more than 50 years’ experience of the South Wales market.
What is the Welsh Government’s plan for economic recovery following the coronavirus pandemic?
We know the UK Government has announced a so-called ‘New Deal’, putting jobs and infrastructure at the centre of its economic growth plan, with a promise to ‘build, build, build’.
Whether these are any more than political slogans remains to be seen, but at least it’s a start.
In Wales the plan is less clear, if there even is one.
Last week the Chancellor Rishi Sunak announced a package of measures to help various sectors of the UK economy in his Summer Economic Update.
For those of us in the housebuilding sector, one particular measure stood out – the raising of the stamp duty threshold to £500,000. This will take effect immediately and last until March 31st 2021.
It is hoped the measure will offer support to those looking to enter the housing market and encourage the housebuilding industry to continue building to protect the economy from potential recession.
In his statement the chancellor rightly recognised the value of housing as “one of the most important sectors for job creation”. He said that the stamp duty cut would “catalyse the market and boost confidence”.
However, the measure will only apply in England as in Wales stamp duty was replaced by the Land Transaction Tax (LTT) in 2018 when certain tax raising powers were devolved.
So, how did the Welsh Government respond? Did it immediately follow suit with a cut to the LTT? No. In a statement it said it was “actively considering” what the change meant for its own tax rates.
The Welsh Government needs to act fast to aid the economic recovery here in Wales.
As I have written here before, the housing market (not just new build developers) supports thousands of jobs in Wales and housebuilding generates tens of millions of pounds for the Welsh economy every year.
It is vital that this valuable sector is urgently given the support and encouragement it needs to help Wales recover from the impact of Covid-19.
That’s why we are calling on the Welsh Government and Welsh Ministers to follow England’s lead and announce an immediate cut to the Land Transaction Tax.
This simple step will give people in Wales the confidence to look for their first home or consider moving and it will aid the Welsh Government’s stated ambition to reopen the housing market. While the LTT here in Wales does not require any tax be paid until a property price of over £180,000.00 and then on a graduated rate, we have already seen evidence of potential buyers looking to delay their purchase/ completion until a decision is made here in Wales.
We simply cannot afford for Wales to be left behind.