Glass Times editor Nathan Bushell discusses the connection between high stamp duty and the increase in high-end fenestration projects.
Stamp duty increases to 10% on properties bought for more than £925K. There is a link between this and the increase in demand for high-end fenestration products, as discussed by Palmer Market Research and others, according to Origin’s marketing director Ben Brocklesby.
“The government has played into the fenestration industry’s hands,” he said, when I met him last week.
Ben’s reasoning is that homeowners would much rather buy a lower value property (below the stamp duty threshold) than buying a property that commands a higher stamp duty and giving that money to the government. The money that they save could go into improving that home – giving them the home they want and bringing it up to the value that they had budgeted for.
There is a lot of sense in this. Many people grumble that stamp duty is stifling the housing market, but as far as companies supplying windows, doors and conservatories are concerned, they should welcome the fact that people are using this as an opportunity to build the house of their dreams rather than buy it.
It is an angle that I hadn’t considered before now, and it gives substance to those statistics that have done the rounds in our industry – that a flattening of the domestic entrance door market has been offset by a shift towards higher-end products, such as aluminium, for example.
Does this mean that if the government were to lower stamp duty, or increase the threshold when the higher stamp duty kicks in, then the demand for high-end windows, doors and conservatories could fall?
It’s worth bearing in mind I suppose.