BUDGET 2017 Stamp duty has been abolished for first-time buyers on new homes up to the value of £300,000.
In London it will also be abolished on the first £300,000 of properties bought by first-time buyers up to the value of £500,000.
Chancellor Philip Hammond said a stamp duty holiday: “Would only help those ready to purchase now, offering nothing to the many needing to save for years.”
However, the immediate view is that while the gesture is symbolic, it will do little to reverse the declining trend in home ownership.
Susan Emmet, head of Policy Exchange’s Housing and Urban Regeneration unit, said: “It is the most headline-grabbing measure, which is why he announced it last, and the documents say it is going to cost £3.2bn over the course of the next six years.
“But it is more the signal, a gesture rather than a significant change. They want to be able to show they are helping first-time buyers and keeping the dream of home buyers alive.”
The first £300,000 of a home purchase is subject to stamp duty of £5,000, while much of the decline in transactions is thought to be due to owners of larger homes being unwilling to sell up because of the prohibitive cost.
Carter Jonas head of residential Rory O’Neill said: “The chancellor has potentially missed a trick in failing to incentivise empty-nesters and prospective downsizers, many of whom retain their four- and five-bedroom homes without filling them, at the expense of the second-steppers’ ability to upsize.
“While the supply of new homes needs to be upped, we also need to better allocate the homes already in existence.”
Emmet said: “It is not going to solve the housing crisis, and we are not going to see a massive reversal in first-time buyers.
“There are other barriers: Deposits are still a massive barrier, people have debts from university, and affordability is still a big issue regardless of stamp duty. Let’s not forget there are not that many homes coming to market.
It might help in the new homes market, if you couple that with Help to Buy, but overall it is not going to reverse the declining number. It is more of a structural change than that.”
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