Homebuyers who make their property more environmentally friendly should return the stamp duty demanded by some of the UK’s top executives.
A call to action by business leaders, including Chris O’Shea, head of energy giant Centrica, was voiced in a letter to Business Secretary Kwasi Quarteng ahead of his energy security strategy, which is due to be released this week.
The reduction in the state duty is part of a package of requirements to improve energy efficiency against the worsening cost of living for households, mainly due to high fuel bills.
Refund: stamp duty discount included in energy efficiency package
The letter, signed by members of the Coalition of Sustainable Homes and Buildings, including CEOs such as Carl Arntzen of boiler maker Worcester Bosch and David Lindberg of NatWest Retail, outlines a plan from eight sides.
This includes a proposal to “reform the stamp duty” to include a discount for households that have “improved their energy efficiency within two years of purchase” as well as a tax adjustment “based on home energy efficiency.”
The source said: “There is no time to wait – the Government needs to think urgently and creatively about the problem, considering absolutely everything. Reform of the stamp duty could change the dial. ”
An existing homeowner who relocates to property worth £ 250,000 can save £ 2,500 on stamp duty payments. That could rise to £ 15,000 for a buyer who buys a house for £ 500,000.
In November, the average price of a British house for the first time exceeded 270,000 pounds.
Other proposals in the letter include a public information campaign on energy efficiency, doubling “funding and ambitions in the social housing sector” and a national housing audit to “comprehend the exact state of the housing stock.”
The signatories say their demands are in response to “a background of unprecedented rising energy costs and heightened concerns about energy security.”
A government spokesman said: “Our strategy for heat and construction sets out a complete package of measures to modernize the country’s buildings.
“We are also accelerating our progress in improving the energy efficiency of homes in England by investing more than £ 6.6 billion in the decarbonization of homes and buildings and the introduction of higher performance standards.
“Last week, we announced plans to reform VAT benefits for families wishing to install energy-saving materials.”
Property deals can sometimes culminate in the execution and registration of an agreement. Sometimes, the sale may be abandoned halfway, after the payment of token money, or even after some of the prices have been made. For any reason, the deal may be canceled by either the seller or the buyer. The seller may change his mind midway through the transaction because he finds a better offer. The buyer may have to let go of his plans to purchase because of unforeseen circumstances that impact his earning capacity. In other cases, the buyer may need help to secure a loan to go ahead with the purchase. In other words, there may be a wide variety of reasons for which a deal may fall through.
The cost of upgrading a home has increased significantly as households rush to meet “net zero” targets or risk paying higher mortgage rates.
Banks warned this would create a group of “climate prisoners” as properties on the market need expensive eco upgrades to become less attractive, and prospective buyers are punished with higher borrowing costs.
David Postings of UK Finance warns that if the funding and physical implementation of this change is not thought through, there is a real “risk” that customers will be excluded from “ready access to the property market as a new cohort of climate prisoners.”
Lenders have called on the Government to incentivize upgrades by refunding stamp duty to buyers who pay for green upgrades within two years of their initial purchase.
This, they argue, would increase demand for energy-efficient houses and encourage homeowners to retrofit their homes, UK Finance said.
Buyers could save thousands. The Office for National Statistics said the average asking price was £296,000 in August, meaning the stamp duty refund would be worth £2,300.
All properties must have an “Energy Performance Certificate,” graded from A to G, depending on their green credentials. Almost 17m properties in the UK currently have a rating below C, which is considered poor.
Postings commented: “We need to act thoughtfully to ensure that we do not make this worse.”
Upgrading 17 million homes with low EPC ratings by 2035 will require retrofitting 1.2m homes per year, or 3,500 per day, according to UK Finance. Just 200,000 homes received these upgrades in 2021.
The report suggested that stamp duty rebates should only be implemented after 2025, when there will be enough workers to carry out these upgrades.