Stamp duty is to be frozen for a year on properties costing less than £175,000 as part the Government’s measures to help the housing market.
The level at which the 1% purchase tax has to be paid is to be increased from £125,000, from Wednesday morning. The Government says it now estimates half of all property transactions will be exempt from stamp duty.
The move was welcomed by some, as mortgage lenders Halifax told the BBC: ‘This is a sensible measure and it will help the housing market.’
Other measures aimed at boosting the market include ‘free’ loans of up to 30% for first time buyers in England. Households earning less than £60,000 will be offered loans free of charge for five years on new properties, co-funded by the state and developers.
Once the five-year period is over, homebuyers will be asked to pay a fee, the Government stated.
Michael White, a property lawyer at Dawsons LLP commented: ‘The stamp duty proposals announced today will not make one iota of difference to the state of the UK housing market. If there are no competitive mortgages available then knocking a maximum of £1,750 off a purchase is a complete and utter waste of time.
‘Take London for example where the average property is worth around £375,000. I can’t imagine the 7.5 million or so people living in the Capital are going to be jumping for joy at today’s announcement.The rate of transactions that we are seeing at the moment is so low that the Government will be making very little revenue from stamp duty anyway. The Chancellor might as well have suspended stamp duty on all residential properties for 12 months. That might have encouraged people to think about buying.’