After re-reading the government’s analysis of the Stamp Duty relief for first-time buyers published just after the Autumn Statement last November, it seems unlikely.
Stamp Duty relief for purchases of residential property up to £250,000 was introduced on March 24 2010. Between March 2010 and August 2011, on average 22% of the total first-time buyer transactions made use of the relief.
It also suggests house prices went up by between 0.5% and 0.7% as a result of the tax holiday, especially for properties around the previous 1% Stamp Duty threshold of £125,000.
So whatever benefit was gained from the relief was effectively nullified by higher prices. On this evidence the analysis concluded it had made little impact to first-time buyer numbers.
Will the government’s NewBuy Guarantee scheme have better luck? Hopefully, but it seems to be primarily based on boosting jobs and growth, with any benefit to housing secondary.
Lack of housing for first-time buyers is the main problem and until that improves, with so-called second steppers better able to trade up, this isn’t going to change.
But the government’s true benchmark should be ensuring people have affordable homes to live in, whether they rent or buy.
Housing minister Grant Shapps’ comments in the House of Commons last week that rents were not rising in real terms – that is, above the rate of inflation – was a clear indication that the government is deaf to the difficulties both buyers and renters have in putting an affordable roof over their heads.