30 Mar

The budget brings no stamp duty reprieve

The budget brings no stamp duty reprieve

When the chancellor George Osborne revealed his budget for 2012 last week (March 21st), many estate agents and first-time buyers up and down the country would have been looking for a last minute change to the stamp duty holiday, as there had been hope that it would be extended beyond its March 24th deadline.

However, this was not to be, with the government instead announcing that there would be a larger budget to help get builders back on sites and increase the number of new homes available in the market to try to alleviate the housing shortage.

Under the new project, builders will be helped out by a fund of £150 million, which it is hoped will help them to primarily finish the construction of projects which had previously been started and then abandoned.

Peter Bolton King, the chief executive of the National Federation of Property Professionals (NFOPP) however said that, although this was an encouraging sign, it was merely a drop in the ocean to just help to build new properties.

"The sector is much bigger than just new homes.

"The concern we have is that we would like some of the initiatives, like with the mortgage insurance guarantee, if there is a way in which that could be extended into the mainstream market, then clearly that is going to make life a lot easier for many people."

This is coupled with a new scheme, entitled NewBuy, under which first-time buyers can gain a mortgage for their new property with a deposit as low as five per cent, because of the fact that lenders can take out an insurance policy, which means that they can give people higher mortgages without fear of losing substantial amounts.

The housing minister Grant Shapps has claimed that these combined schemes could see the government help 100,000 people onto the housing ladder who may have otherwise been unable to purchase a home due to the prohibitive rate of deposit needed.

"We want to help everyone achieve their aspirations, and feel the pride of home ownership. So I'm delighted that from today the NewBuy Guarantee will give thousands of prospective buyers the chance to buy a home with a fraction of the deposit normally required."

However, the project has garnered a negative response from some working in the property market, mainly because of the fact that it is only available on new build properties, meaning that costs will still be relatively high for new buyers who are looking to purchase their very first home.

It was the decision not to extend the stamp duty holiday which had brought about the biggest level of criticism however, because of the belief that a spike in the activity in the property market at the end of 2011 and in the early part of this year had been caused by people who were looking to take advantage of the concession.

Steven Lees, director at SmartNewHomes, criticised the decision, saying that the government had missed a big chance to help people onto the property market who may find that they could not buy in the current situation as a result of prohibitive costs.

"The decision not to extend the Stamp Duty holiday for first time buyers on properties priced under £250,000, which expires this weekend, is a missed opportunity by the government to help the people who really need it," he said.

However, there were some levels of praise, with David Orr, chief executive of the National Housing Federation, noting that it was a good move from the government to close the loophole which was seeing many people purchasing much more expensive homes paying a very small level of stamp duty.ADNFCR-1222-ID-801330893-ADNFCR

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