UK Chancellor of the exchequer Philip Hammond’s first UK budget announcement was filled with a number of details designed to woo voters, while not loosening the purse strings too much.
Among the details that garnered a lot of interest, was one scrapping stamp duty charges for first-time buyers of properties worth up to £300,000.
The Chancellor also stated first-time buyers of properties worth up to half a million pounds, would only be charged stamp duty on the proportion above the initial £300,000. First-time buyer purchasers of property worth over £500,000 will not receive any support.
Move to help 1 million home-buyers
According to Conservative calculations, the move will mean 80% of first-time buyers will not have to pay any stamp duty. In addition, some 95% of all first-timers will receive some Government assistance with the purchase.
The Treasury also said the stamp duty change could help 1 million first time buyers over the next five years.
However, some bodies weren’t convinced of the broader effectiveness of the stamp duty announcement.
The assessment from the Office for Budget Responsibility (OBR) said the removal of stamp duty for first-time buyers would only serve to push UK residential real-estate prices up by an average of 0.3%.
The Building Society Association (BSA) was also sceptical of how much benefit the change would bring.
“It is too soon to know whether the permanent abolition of Stamp Duty for first time buyers will have the desired effect and truly help cash constrained young people get on the housing ladder,” said the BSA’s chief economist, Andrew Gall.
“Our data shows that Stamp Duty is a much bigger barrier for home movers than first time buyers,” Gall said, adding: “A lack of housing supply remains the single most important market issue we face.”
Hammond also announced measures to support SME builders and committed to constructing 300,000 new residential homes, per year until the mid-2020s.