Agents and even the Labour Party have backed the government’s scrapping of stamp duty for first time buyers’ purchases up to £300,000 - but it hasn’t won support from everyone in the industry.
Lewis Johnston, RICS parliamentary and public affairs manager, comments: “Scrapping stamp duty for first-time buyers may stimulate activity at a time when the market is subdued, but this does not tackle the underlying problem and is something of a distraction from the need to increase supply.”
Jean-Marc Vandevivere, previously head of residential at British Land and now chief executive at start-up housing developer Platform, says exempting first-time buyers will do little to support housing delivery and only help the well-off.
"A stamp duty cut for first time buyers is understandable politically and the reality is it's unlikely to hit the Treasury's coffers too hard. But the fact is, while maybe stimulating the lower end of the for sale market, it won't encourage the building of new housing and will only really benefit those wealthy enough to be able to save for a deposit” he says.
“Instead the Chancellor should have reversed the stamp duty surcharge for institutional investors. It would have made less headlines, but would have built more homes” says Vandevivere, referring to a call from many for the stamp duty surcharge - introduced on additional homes in April 2016 - to have been reversed, encouraging more homes to be built and brought for private letting.
Platform is a Build To Rent developer with 600 units under management in high employment areas such as Bedford, Bracknell, Exeter, Crawley and Stevenage.
Meanwhile Matt Robinson, chief executive of ‘guaranteed price’ estate agency Nested comments: “Families in cities like London have been hung out to dry by Philip Hammond, as he doesn’t do nearly enough to solve the capital’s stagnant market. By only introducing cuts in duty for [first time buyer] properties under £300,000, the vast majority of London buyers will remain heavily penalised, where a modest family home can easily go for over one million pounds. The Chancellor failed to provide any solution for those already on the property ladder and reliant on quick sales to downsize or move into their dream home.”
Paula Higgins, chief executive of the HomeOwners’ Alliance consumer group, also feels more priority should have been given to reforming the additional homes stamp duty surcharge.
“Under the new system introduced last year these buyers are forced to cough up the extra three per cent and must then go through the arduous process of claiming it back. The fact that refunds are currently running at £10m a month shows how flawed this system is” she says.
“It would make much more sense for the duty to be collected six months or a year down the line if the property isn’t sold. Home movers should not be penalised for the sluggish market.”
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When buy to let mortgages became available I predicted a war between FTB’s and Landlords which the Landlords would easily win. As interest rates fell to historic lows it became expedient to cap asset price rises using artificial means. This has meant massive Stamp Duty rates but at the same time the Landlord has been stripped of his advantages making it a much more even playing field. Unfortunately thoug, encouraging first time buyers ontomthe ladder won’t do a lot of good if the rest of the market is gummed up which it is. All that is likely is this new wave of owners will end up trapped in unshakeable rabbit hutches alongside their more Mobile tennant counterparts. In today’s market to avoid this trap FTB’s need to bypass the one bed flat and go directly for a family home, that’s going to be where the competition and price rises occur
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