However, the meagre rise of just £5,000 in the stamp duty threshold will have virtually no impact on the fortunes of most first-time buyers.
The Chancellor has committed a total of £970 million to aid 35,000 first-time buyers onto the housing ladder by co-funding a quarter of the purchase price, leaving the remaining three quarters to be funded by the buyer. In addition, a scheme will be piloted that funds three quarters of the purchase, leaving the buyer with only 25 per cent to raise.
This injection of finance at the bottom end of the market will create a stir of activity, drawing more people into property ownership and enabling existing first home owners to move up the ladder.
Ian Randall, managing director of Linden Homes South East, said: “First-time buyers are the life blood of the housing market and any initiatives from the Government to give them a leg up onto the housing ladder will be beneficial to the wider market.
”With existing land restrictions resulting in an increased number of apartments being built, an ideal market place is already being created for a new generation of property owners. Consequently, first-time buyers will be able to benefit from buying new homes, rather than the traditional lower quality second hand homes that often require high repair and running costs.”
However, the Government has once again failed to make a big difference to the extortionate stamp duty costs faced by the majority of first-time buyers, by raising the exemption threshold by just £5,000 to £125,000. With the average amount being forked out for first homes at £153,633 (source ODPM) and much more in London and the South East, this latest change in legislation simply does not go far enough and will fail to make a significant impact.
Randall continued: “Hand in hand with initiatives to help first-time buyers must be the release of more land for development and a faster planning system. If there are not enough suitable properties on the market, shared equity schemes will only serve to push prices up higher by creating hundreds of thousands more potential owners while failing to provide enough new homes.”
