As a result of the coronavirus pandemic, house prices have dropped by the largest amount since 11 years.
And now in a bid to boost the housing market, Chancellor Rishi Sunak is set to announce a stamp duty holiday.
Stamp duty is a lump sum payment that someone buying a property or piece of land over a certain price has to pay.
House-buyers in England and Northern Ireland pay the fee on homes over £125,000, although it’s over £300,000 for first-time buyers.
According to The Sun, the Chancellor is set to cut stamp duty for homes up to £500,000 in the next few days.
He could unveil the new plans as part of his “mini-Budget” which will be delivered in the House of Commons tomorrow afternoon.
So how will the stamp duty holiday work?
What is a stamp duty holiday?
Treasury officials are believed to be looking at raising the threshold at which homebuyers start paying stamp duty.
One source revealed to The Sun that the new stamp duty threshold could be set at £300,000 but it might be as high as £500,000.
This would mean homes at the lower end of the housing market in London will be taken out of stamp duty.
It comes after ex-Chancellor Philip Hammond removed stamp duty on up to £300,000 for first-time buyers in 2017.
Would the stamp duty holiday help the economy?
The Treasury hopes that the possible stamp duty holiday will help the property market during the coronavirus pandemic.
At the start of the outbreak, viewings, sales and moves were suspended for a period of time.
But experts say that a stamp duty holiday will encourage more home owners to move, helping to bring life back into the market.
Paul Johnson, director of the Institute for Fiscal Studies, told the Times there was a “good chance” that it would benefit the economy.
He said: “The housing market is very thin… Anything which gets it moving would potentially help.”
Tom Bill, head of UK residential research at estate agency Knight Frank, also agreed it would help many people.
He told Financial Reporter: “A stamp duty holiday would provide welcome financial relief for millions, including first-time buyers.”
How long would it last?
According to the Sun, ministers were considering a six-month stamp duty holiday to revive the housing market.
However, the Government is yet to officially announce these measures.