A broker at Rotherham-based Mortgage Talk has called for Stamp Duty to be abolished for first-time buyers.
Andrew Frankish, technical director at Mortgage Talk, says Stamp Duty should be abolished for first-time buyers to help them gain a foothold on the property ladder as well as to support the housing market at the bottom.
He says: “Unless we have a buoyant supply of first-time buyers, it is unlikely that we will be able to sustain a strong housing market well into the future, regardless of what happens to interest rates. What is the point of the government claiming to encourage first-time buyers without offering them any genuine incentives?”
The comments coincide with the National Association of Estate Agents' call for the introduction of a fairer system by suggesting Stamp Duty should be graduated.
Frankish adds: “I can only reiterate this plea, and point out in addition that, since the £60,000 threshold has not been indexed for over 10 years, it is now completely out of date.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.”
Frankish states that in many regions house price inflation has made it impossible to find a habitable property beneath £60,000 – the threshold at which Stamp Duty becomes payable. The result is that even the most modest starter home attracts a government tax of at least £600. In many localities, the average first-time buyer can be paying Stamp Duty of around £1,500 to the Treasury.
He adds: “Of course, the chancellor is reluctant to apply any form of indexation to Stamp Duty, as this provides a valuable source of revenue for government coffers.”