The think tank believed that while supply and demand issues were pushing property prices out of the reach of FTBs, it was the associated fees that were causing further distress.
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It recommended that either the Stamp Duty threshold should be immediately set above the average first-time property price or that the UK should follow Eire, which abolished Stamp Duty for FTBs in June.
The report said: ‘Property prices alone are not the only factor that has become a worry to many FTBs. There are lots of other costs associated with buying a property, including bank fees, legal fees and Stamp Duty. Not all of them, obviously, can be influenced by government. But where government does have an influence on them, we believe that it should try everything to alleviate Britain’s growing affordability crisis.’
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The Policy Exchange believed the UK had lost the bottom rungs of its property ladder through 15 years of house price growth, while it also stated that when Labour came to power, nearly all FTBs were exempt from Stamp Duty, whereas now, the average new buyer will be hit by a significant bill.
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David Mead, managing director at Flexible-mortgage.net, commented: “Moving the threshold or removing Stamp Duty altogether for FTBs makes a lot of sense. However, even the threshold at £250,000 is slowing people who would be selling their property down. Fundamentally, Stamp Duty may be £1,500, but if FTBs can’t afford property in the first place, it doesn’t really matter.”
