Responding to today's announcement that the temporary first-time buyer stamp duty concession will end on 24 March 2012 as planned, CML director general Paul Smee said: "It is disappointing to see the government withdrawing the stamp duty concession that currently benefits first-time buyers.
“While the concession may not have stimulated additional demand, it was a significant help to home-owners entering the market and its removal runs counter to the themes of the new housing strategy.
“It is likely that we will see a bunching of eligible first-time buyer transactions early next March to beat the expiry date on the concession."
Wendy Evans-Scott, president of the National Association of Estate Agents, agrees. She said: “We were disappointed to see that the first-time buyer holiday for Stamp Duty Land Tax is not being extended beyond March 2012.
“As such, today’s Autumn Statement fails to provide much comfort to the property market. First-time buyers are the lifeblood of the property market, and our recent data shows the number of first-time buyers getting on to the housing ladder has reached a three-year low.
“With the stamp duty holiday disappearing from next March, the Government will need to do more to help the fragile first-time buyer market.”
Grenville Turner, chief executive of Countrywide, said: “At a time where deposit affordability remains a significant barrier to not only first-time buyers, it is disappointing that the Chancellor did not take the opportunity to extend the Stamp Duty holiday for first-time buyers and has instead added another barrier for first-time buyers to get onto the property ladder.
“A positive antidote to assist the vast majority of homemovers and the resale market would have been a Stamp Duty holiday for all homebuyers up to £250,000
“Whilst the measures announced in the Government’s housing strategy are a step in the right direction, they only scratch the surface of the fundamental issues that have restricted the housing market in recent years – housing supply and the high level of deposits required.
“The prediction that 100,000 families will benefit from the Mortgage Indemnity Scheme may be optimistic, as we are yet to hear the detail of whether it enables lenders to offer cheaper rates.”
Ben Thompson, managing director of the Legal & General Mortgage Club, said: “It is disappointing that the Government did not consider relaxing the prohibitive strain of stamp duty as this may be a way of kick starting movement in a largely stagnant section of the housing market.
“Whilst the Government is obviously limited in its ability to offer huge tax giveaways as the public coffers stand largely empty such a move may have ended up proving beneficial as it would grease the wheels of what has become a vitally important part of the UK economy.
“Extending the FTB holiday and including some sort of relief for second-time buyer / first-time mover market is certainly something the Chancellor should consider in the future.”
Peter Rollings, CEO of estate agent Marsh & Parsons, said the failure to extend the holiday for first-time buyers will undermine the government’s own attempts to kick-start the first-time buyer market across the country.
“While the new mortgage indemnity scheme may improve the accessibility of mortgage finance to many credit-worthy borrowers, first-time buyers will need to save for longer to pay the stamp duty bill as they move,” he said. “If the government aimed to stimulate the national first-time buyer market in spite of the wider economic conditions, combining the extension of the stamp duty holiday with the new indemnity scheme would have boosted the chances of a significant increase in first-time buyer activity.
“In effect, Osborne is giving with one hand, and taking away with the other.”
“But the Chancellor has also missed an open goal by failing to address the outdated and iniquitous stamp duty tax system. As things stand, stamp duty is a regional tax rather than a national progressive tax, and buyers in London and the South East must bear the financial brunt of the tax for the simple reason that house prices are higher.
“This will remain the case for as long as the duty doesn’t take into account the fact that house prices are not uniform across the country.
“The housing market plays a vital role in supporting the UK’s economic growth, and a more equal and progressive tax system - alleviating the pressure on the lower tier of the market across the whole country – would create a busier market.
“In turn, a healthy housing market would feed the wider economy, boosting demand for supporting industries and creating opportunities for builders, electricians, kitchen manufacturers and plumbers to name but a few.”
And David Whittaker, managing director of Mortgages For Business, was disappointed the Chancellor had neglected the private rental sector in the Statement. He said: “Despite the underwriting of loans for first-time buyers, the boost for house building and the revitalisation of the Right to Buy scheme, we cannot escape the fact that the private rental sector will be the safety net of the housing market for the next few years.
“Lending volumes for owner occupiers will continue to be subdued as high living costs and low interest rates prevent thousands from getting a foot on the first rung of the housing ladder and the 100,000 young people and families the government hopes to help with the latest scheme are but a fraction of those who need a roof over their heads.
“Landlords and property investors are essential in helping plug the housing shortfall the UK is currently suffering but the government has chosen to ignore this fact and has done nothing to help this vital element of the housing market.”
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