FTB stamp duty cut to raise house prices, says OBR


The Office for Budget Responsibility says a Government move to cut stamp duty for first-time buyers will raise house prices by 0.3 per cent.

Earlier today Chancellor Philip Hammond scrapped stamp duty for first-time buyers on properties worth up to £300,000.

The Chancellor has said that in more expensive areas “such as London”, stamp duty will be abolished on the first £300,000 of properties valued at up to £500,000.

The OBR says it expects the move to cause a 0.3 per cent rise in house prices, mostly in 2018.

It says it thinks this because the move gives FTBs more cash to put towards higher deposits.

The OBR adds that the move might also not be that helpful for FTBs, noting that most new buyers benefitting from the 2010 stamp duty holiday would have bought houses anyway.

HMRC figures say the average house price in September was £226,637, meaning a rise of £679 if the OBR is correct.

Stamp duty would be £4,532 on a property of that price, or 2 per cent of the total.



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