The chancellor has announced stamp duty will be scrapped for first time buyers on homes up to £300,000 and up to £500,000 in high price areas.
The move will affect roughly 80 per cent of first time buyers, and will come as a huge relief for people who are struggling to get on to the property ladder.
Philip Hammond was under pressure to deliver a game-changing Budget today, and after a string of concerning economic data he saved the eye-catching announcement until the end.
The change will come in from today, meaning all first time buyers moving onto the property ladder beneath the proposed thresholds will not have to pay the tax.
That could mean savings of up to five per cent for new homeowners.
But according to Jonathan Hopper, managing director of Garrington Property Finders, the Chancellor is tackling only part of the problem – the shortage of new homes, rather than the shortage of homes for sale.
“It’s a mistake made by politicians of all stripes,” he said. “The lure of the building site photo opportunity, in which a beaming minister dons a hard hat to drive home the message ‘Britain is building again’, is all but irresistible to Westminster.
“Britain clearly needs to build many more homes to keep up with future demand. But the Chancellor’s excessive focus on this small part of the housing shortage misses the bigger, and more immediate, picture.
“Even if his plans do unleash a wave of new homebuilding, it’ll take years for the property market to see any significant benefit. The Chancellor is solving the problem of tomorrow but doing little to solve the problem of today – the abject lack of a fully functioning property market.”
Simon Heawood, CEO and Founder of Bricklane.com, says abolishing stamp duty is a drop in the ocean given the affordability challenge of getting Generation Rent onto the property ladder.
“Increasing supply of the right kinds of housing will also go some way to stopping ever-rising house prices, but many of Generation Rent still face the prospect of waiting many years to buy their own home,” he said.
“The focus on bridging the housing generational gap must lie on the all-important first rung of the ladder – saving up for a deposit. The issue of housing supply and price is important, but looking at measures to support Generation Rent’s ability to get together a deposit is crucial.
“The current situation will mean a continued reliance on the private rental sector so it’s welcome news that the government will be opening a consultation on how to encourage landlords to offer longer tenancies. Some forward-thinking landlords have been offering more stable tenancies for a while now and it is a great win-win – tenants get greater stability, enabling them to feel more at home, whilst our investors have the benefit of higher occupancy rates.”
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