Osborne ends Stamp Duty holiday for first-time buyers
Tuesday, 29 November 2011 2:54 PM
The Stamp Duty holiday for first-time buyers will not be extended and will end on March 2012, George Osborne announced today.
During his autumn statement the chancellor confirmed that he would not be bowing to pressure from industry bodies – such as the Council of Mortgage Lenders (CML) – to continue the Stamp Duty holiday.
Paul Smee, CML director, labelled Osborne's decision "disappointing".
He continued: "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."
Grenville Turner, chief executive of Countrywide, accused the chancellor of adding "another barrier" for first time buyers struggling to get onto the property ladder.
He said: "A positive antidote to assist the vast majority of homemovers and the resale market would have been a Stamp Duty holiday for all homebuyers up to £250,000.
“Whilst the measures announced in the government’s housing strategy are a step in the right direction, they only scratch the surface of the fundamental issues that have restricted the housing market in recent years – housing supply and the high level of deposits required."
Osborne did pledge to help first time buyers through the mortgage indemnity scheme where the government will underwrite some of the risk to allow buyers of new homes to borrow up to 95 per cent of their value.
He said: "The government can use the low interest rates we’ve secured to help young families too, who want to buy a home but can’t afford the very large deposits that banks are now demanding.
"We will use mortgage indemnities to help 100,000 such families buy newly built homes."
Osborne also promised to "bring back to life" the Right to Buy scheme, describing it as "one of the greatest social policies of all time".
He continued: "Families in social housing will be able to buy their own homes at a discount of up to 50 per cent.
"We will use the receipts to build, for every home purchased, a new additional affordable home."
Much of the chancellor's autumn statement was pre-empted by last week's launch of the government's new housing strategy.
Liz Peace, chief executive of the British Property Federation, said: "The housing provisions in the autumn statement are a welcome step towards a coherent and long-term vision for house building in this country, and it is good to see the government has moved to kick start stalled development through the Get Britain Building fund and address mortgages for first time buyers, who are vital for the overall health of the market.
"We would urge the government to press on quickly. The provisions are welcome, but come not a moment too soon with house building at historical lows and the general economy in dire need of support."
