Prior to the Budget announcement, a number of commentators suggested that Stamp Duty would have to be re-aligned to the rate of inflation to match current house prices.
With house prices averaging at over £175,000, most properties are still subject to Stamp Duty, with the lower threshold set at £125,000.
However, announcing the Budget, Darling said that Stamp Duty thresholds would only be waived for those on shared ownership schemes that owned less than 80 per cent of their property – a move that has angered the industry. Speaking at the House of Commons, Darling said:
“Key workers such as teachers and nurses will be able to borrow money from shared equity schemes. Stamp Duty on shared ownership homes will not be required until people own 80 per cent of their home.”
Commenting on the government’s failure to re-align Stamp Duty thresholds for the wider market, David Newnes, managing director at Your Move, said: “The Chancellor has ignored the need for a boost in the property market – and that was a big mistake. The UK market is feeling the squeeze as access to credit tightens.
"Many first-time buyers (FTBs) need to borrow in excess of the value of their home to cover moving costs, fees and Stamp Duty. If Darling had given them a Stamp Duty holiday the surplus costs of buying a home would have dropped significantly. That would allow FTBs to get a step up onto the property ladder. The Chancellor has failed to acknowledge the effect the credit crunch has had on FTBs’ ability to borrow.”
Paul Chafer, commercial director at Stroud & Swindon Building Society, added: “We are disappointed to see that the only changes to Stamp Duty threshold were to shared ownership schemes.
"Stamp Duty is something that must be bought in line with house price inflation for all borrowers – starting by raising the level at which Stamp Duty becomes payable to £200,000.”
Martin Ellis, chief economist at Halifax, said: “It is disappointing that the Chancellor did not take the opportunity today to increase the Stamp Duty thresholds.”
