The stamp duty cut will cost the Treasury £230m in 2010-11 and £290m in 2011-12 to be funded by the introduction of a new higher stamp duty band of 5% on properties costing more than £1m from April next year.
In a response to the Budget announcement David Bexon, Managing Director of SmartNewHomes.com said:
“We are delighted that the Government has finally listened and is scrapping Stamp Duty for first-time buyers of properties up to £250,000, something we have been calling for for some time. While many developers already offer a range of incentives that often include stamp duty paid, this crucial cost saving is a real chance for the UK to get moving. However, some of the sparkle will be lost if lenders continue to refuse to look more favourably on their first-time buyer mortgages, which are still sadly lacking in the new build sector."
Peter Rollings, managing director of Marsh & Parsons, commented:
“The Chancellor’s measures are not going to help first time buyers looking for property in central London. His changes are just going to tax Londoners and the South East, where property prices are proportionately higher, harder.
Only 3% of the homes we have for sale fit into the sub £250,000 category. Admittedly, central London may not be typical first time buyer territory, but it’s little wonder why. Mortgage lenders now typically require a 25% deposit from first time buyers, meaning they would need to put down over £84,000 to purchase the average London property – realistic for only the tiny minority with substantial parental assistance.
“The end of the stamp duty ‘holiday’ at the turn of the year did not have a significant impact on the London market and with so few London properties in the sub £250,000 threshold – neither will this. But the increase tax payable on a home worth £1million – which is not the preserve of the super-rich in the capital – will hit Londoners hard. Lots of flats fit into that category in London. There will be repercussions for the wider property market down the line.”
“Central London is in effect inaccessible for most first time buyers, but areas like Clapham – although not immune to the impact of rising prices – remain ever-popular destinations for young professionals looking to buy their first home. These areas will benefit from the Chancellor’s benevolence.”
Have your say on this story using the comment section below