December 05, 2011
The government’s decision to end its 1% stamp duty concession for all first time buyers purchasing houses under £250,000 has been described as “disappointing” by the Council of Mortgage Lenders (CML).
Despite pressure on the government to extend the scheme, this week it announced that the concession would come to an end on 24 March 2012 as planned.
According to the government, the initiative has not resulted in large numbers of buyers coming to the market, as had been originally hoped, and the concession has been largely 'ineffective'.
However, data from the Office for Budget Responsibility shows that the first time buyer market will continue to struggle in the coming years and the CML believes scrapping the concession will only compound the problem.
Responding to announcement, which came during the Chancellor's Autumn Statement, 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."
The government has refuted the CML’s claims and says it will look to prioritise schemes that offer better value for money for first time buyers. These will include a newly announced mortgage indemnity scheme that will allow around 100,000 first time buyers to secure a home with a deposit of only 5%.
