Stamp duty concession to end
First-time buyers will no longer receive an exemption from stamp duty from March 2012 as the government says the relief is “ineffective”.
Documents with Chancellor George Osborne’s Autumn Statement reveal the view that the tax relief failed to get more people on the property ladder.
The temporary exemption meant first-time buyers were free from the 1% stamp duty on homes costing under £250,000.
The Council of Mortgage Lenders (CML) said first-time buyers’ purchases could be bunched up at the start of next year before the concession is scrapped on 24 March.
The government’s housing strategy, announced earlier in the month, included a mortgage guarantee scheme to encourage lenders to offer 95% mortgages to buyers of new homes.
Paul Smee, director general of the CML, said: “While the concession may not have stimulated additional demand, it was a significant help to home-owners entering the market and its removal runs counter to the themes of the new housing strategy.
“It is likely that we will see a bunching of eligible first-time buyer transactions early next March to beat the expiry date on the concession.”
Wendy Evans-Scott, president of the National Association of Estate Agents, said: “First-time buyers are the lifeblood of the property market, and our recent data shows the number of first time buyers getting on to the housing ladder has reached a three-year low.
“With the stamp duty holiday disappearing from next March, the government will need to do more to help the fragile first-time buyer market.”
Current Stamp duty thresholds
1%: Properties of £125,000 to £250,000, but first-time buyers are currently exempt
3%: £250,000 to £500,000
4%: More than £500,000
5%: More than £1m, residential property only
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Campbells Online