Chancellor Alistair Darling’s decision to cut stamp duty for two years for most first-time buyers in his last Budget before a general election has been largely welcomed by many in the construction industry.
There are a few caveats, however. Ian Fletcher, director of policy, at the British Property Federation said: “Greater relief from stamp duty will be a confidence boost to the housing market, helping to ensure the housing recovery does not stall. It will be of limited value to first-time buyers, however, who typically have to find a deposit of £33,000 at present. Raising the threshold will effectively knock 18 months off the 18 years it would take the typical 25 year-old to save a £33,000 deposit.
“Such a policy also helps highlight the unlevel treatment of individual and institutional investors in the private rented sector, this policy meaning the individual will not pay stamp duty on any investment under £250k, whereas an institution trading in portfolios might pay 4% stamp duty on small flats they are trading, because of the policy of aggregating transactions. Government must act to stop this distortion.”
Simon Gammon, of Knight Frank Finance said: “While any help to get first time buyers on the property ladder is extremely welcome, the doubling of the stamp duty free limit does not address the major issue. The problem that all first time buyers face is the lack of mortgages available above 75% borrowing, and of the few available the prohibitive cost of them. If the government really want to solve this problem then it should be the banks that they should be targeting.”
“This Budget is a huge boost to both home buyers and the housebuilding industry,” said HBF executive chairman Stewart Baseley. “I am pleased the government has recognised the importance of ensuring that people are able to buy homes. The steps taken today can only help reduce the social and economic impact of the housing crisis we have in this country and will also sustain many thousands of jobs in the industry and wider economy.”