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The Chancellor’s first budget appears to be a big disappointment for the UK's first-time buyers. Even though he had the chance, benefits like scrapping stamp duty or even just increasing its lower threshold were not taken, thus these would-be buyers are left struggling to get onto the property ladder.
Figures indicate that the number of first-time buyers paying stamp duty is 61%, up significantly from the 47% recorded in 2006, this due to rise in house prices, plus, the proportion of first-time buyers paying higher levels of stamp duty is currently 11%, up from 6% in two years.
The result of these changes, first-time buyers in many parts of the UK need the equivalent of an entire year’s salary to meet the up-front costs of buying their home ( the deposit, stamp duty, legal fees and surveys ) and are currently stopping an ever growing number of buyers from entering the housing market.
It must be said that Mr Darling’s commitment to key workers was a step in the right direction, it enabling this buying group to borrow up to 50% of the purchase price for their home (via the shared ownership scheme), with an exemption from paying any stamp duty until they own 80% of the property. However, figures are showing that the take-up of these schemes to date has been extremely low, limiting the possible benefits of the initiative..
The best initiative would have been to scrap stamp duty for the these struggling first time buyers, this achievable by the simple measure of increasing the threshold at which it is paid. It must be recognised that first time buyers are the life blood of the housing market and thus it is essential that the Government recognises this and introduces measures to assist them in buying their first home. Indeed, if action isn't taken soon there is a serious danger that this essential buying group will be pushed out of the market altogether. |
