Brokers have backed the Council of Mortgage Lenders' call for Stamp Duty to be abolished for first-time buyers.
The CML said last week that such a step would be the best way to help firsttime buyers into the mortgage market, also suggesting a sliding scale so that Stamp Duty thresholds increase in line with house price inflation.
The call has prompted further support from brokers who are seeing an increasing number of first-timers being forced out of the market.
Andrew Frankish, technical director at Mortgage Talk, says that in many regions house price inflation has made it impossible to find a property beneath the £60,000 Stamp Duty threshold so even the most modest starter home attracts a minimum £600 tax hit. Some may even have to pay as much as £1,500 to the Treasury.
He says: “Since the £60,000 threshold has not been indexed for over 10 years it is now completely out of date. A decade ago only a third of properties were subject to Stamp Duty – now it is 95%. If the chancellor wants to maintain his Budget commitment to 70% home ownership in this country he must act to make starter homes more affordable.
“What is the point of the government claiming to encourage first-time buyers without offering them any genuine incentives?” But Paul Banfield, partner at Best Advice Financial Planning, says: “Abolishing Stamp Duty for FTBs would result in the government increasing other taxes and barriers. It would be more productive to try to stop any further increases in Stamp Duty across all the thresholds.”
The comments coincide with the National Association of Estate Agents' call for the introduction of a fairer system by suggesting that Stamp Duty should be graduated.