Chancellor Alistair Darling has come under fire from industry pundits for failing to overhaul Stamp Duty to help first-time buyers.
Lenders, brokers and estate agents had called on Darling to tackle the tax in his Budget speech last week.
Their proposals included increasing the minimum Stamp Duty thres- hold, making first-time buyers exempt from the levy or abolishing it altogether.
Mortgage Strategy’s Step Up Stamp Duty campaign has been calling on the government to raise the tax’s threshold since 2004.
Nicholas Leeming, major client director of Propertyfinder.com, says: “Home owners and first-time buyers need financial relief immediately. But once again the government has shirked its responsibilities, merely blowing smoke over the issues in an attempt to disguise its inaction.”
Paul Chafer, commercial director at Stroud & Swindon, says: “Stamp Duty must be brought in line with house price inflation for all borrowers – starting by raising the level at which Stamp Duty becomes payable to £200,000.”
A Rightmove study published last week reveals that only 16% of homes on the market are priced below the £125,000 Stamp Duty threshold.
The property website says the government’s failure to reform the tax means nearly 50% of the UK’s housing stock attracts Stamp Duty fees of up to £2,500.
It adds that more than 25% of the properties on sale today are hit with Stamp Duty fees of up to £15,000.
The only Stamp Duty reform announced in the Budget affects shared equity schemes, where borrowers are exempt from the tax until they own 80% of their properties.
But Adrian Coles, director-general of the Building Societies Association, says this will do little to help those who are unable to take advantage of such schemes.