The return of a Stamp Duty holiday for first-time buyers promised by Shadow Chancellor Ed Balls, together with a new homes building programme, should Labour win the next election, has been given a mixed response.
Ben Thompson, managing director of Legal & General Mortgage Club, said: “The introduction of a two-year Stamp Duty break for first-time buyers, combined with the construction of 100,000 new affordable homes, are exactly the kind of measures the housing market needs to boost growth.
“The average age of first-time buyers has been increasing steadily over the last five years due to a combination stringent lending criteria, high deposit requirements and a lack of affordable housing. A Stamp Duty holiday on properties up to £250,000 will certainly help to rectify this issue.
“This proposed innovation by the shadow chancellor is exactly what the UK economy needs to stimulate growth.
“During the Stamp Duty holiday we saw end in March, the CML revealed data which indicated a 7% jump in loans to FTBs during December 2011.
“The appetite is clearly out there for first-time buyers to get on to the property ladder. However, current market conditions make it extremely difficult. Both the Government and lenders need to work together to make home ownership more achievable for more people, and a Stamp Duty break would definitely be a step in the right direction.”
But estate agents were a little more muted.
Jon Neale, director of Jones Lang LaSalle’s residential research, said: “The suggestion that first-time buyers be exempt from Stamp Duty is welcome, although such steps have been taken before.
“It would help many first-time buyers, struggling with large deposit requirements, to access the market.
“However, with average deposits standing at around £30,000 for a typical £150,000 property – with substantial further amounts required for legal fees – Stamp Duty of £1,500 is hardly the highest hurdle facing the would-be first home owner.”
Jonathan Hudson, of central London agent Hudsons Property, said it might make more sense to take the highest rates of Stamp Duty – hiked in the last Budget – back down.
He warned: “A Stamp Duty holiday could create a stampede for properties and a spike in prices, and then a drop. This could unsettle the property market.”
Brendan Cox, of Waterfords which operates in Surrey, Berkshire and Hampshire, said that Stamp Duty was not a problem just for first-time buyers, but a deterrent for buyers ‘right across the board’. He called for a complete overhaul of the tax.
Nick Sanderson, CEO of Audley Retirement, called for a Stamp Duty exemption for older people, to encourage them to downsize.
.png)
Comments
So that no-one forgets that it was Blair, Brown Cooper and balls that bankrupted this country and they were the ones that in trying to see an end to boom and bust housing cycyles ensured there was a soddin great boom which they and their mates profited from followed by this dire period of stagnation for the rest of us.
Commenting just gets it through to the like of Brit and Rant that their woes were planted and nutured by the last Labour Government. some of us remember the previous Labour administration, it was just the same.
100,000 new homes? That isn't enough to house the queue at Sangatte.
Why comment, its just talk, what they say now and do the next time they are in power to ruin the economy again will be 2 different things.
If there are 100,000 new affordable homes built, the only people to benefit will be the builders and the mortgage companies
100,000 new homes will give a proportion of new home owners the opportunity to have a home but the rest are still stuck without a home or the means to get one
Removing 100,000 1st time buyers from the housing chain delays the start of 100,000 chains thus delaying growth.
His missus demonstrated she knew nothing about our industry during her time at DCLG and now Mr Balls is demonstrating that his understanding of property economics is woefully lacking.
A return to soundbites and pig lipstick politics? no thanks Mr balls
Labour continues to believe that the housing market and the UK economy are one and the same thing (as does Ben Thompson, going by his comments above). Sure, high levels of transactions in the housing market can support economic activity in the wider economy; it can't replace it though.
The political party that nurtured the housing bubble still don't realise that encouraging people to borrow ever greater amounts of money to buy piles of second hand bricks from one another doesn't actually create any new wealth, just shuffles it around. Meanwhile, banks that have lent too recklessly into the property market have insufficient funds to lend to businesses who can generate wealth.
Vince Cable's comments just days before Ed Balls' were much closer to the mark as to why the economy remains in a mess: "We are so good at so many things in this country - but for too long the mirage of growth based on property speculation and financial gambling has hidden the harder virtues of making things productively."