So did the holiday from stamp duty benefit anyone?
As the holiday on stamp duty draws to an end, the government is starting to look
for alternative ways to boost the first time buyer market. However the question
remains, did the 1% tax exemption for first time buyers benefit anyone?
The tax exemption for first time buyers purchasing houses under £250,000
would see 9 out of 10 first time buyers saving up to £2500. To compensate
for this 1% decrease in tax for first time buyers however has been compensated
for a 5% tax on homes costing over £1m.
The chancellor, George Osborne’s review of the stamp-duty holiday described
the attempt at relieving first time buyers as “disappointing” as it
had failed to get more first time buyers onto the market. Nationally, first time
buyers count for two thirds of the property market, but with the number of first
time buyers at a record three year low, the government will have to do a lot more
to help people onto the property ladder.
The problem really lies in the difficulty of first time buyers saving enough money
for a deposit and the difficulty in securing a mortgage. High unemployment and
a weak economic outlook are just mere factors making the property ladder unreachable
for many. However, the government did suggest that the new housing strategy will
encourage lenders to give 95% of mortgages to first time buyers, with the aim
of reassuring first time buyers that they can secure a mortgage.
So should first time buyers be discouraged? Certainly not, although the stamp
duty holiday is coming to an end, there is no reason to stop looking for a way
onto the property ladder. For guidance of house prices and properties available
in your area, free property portals such as Propertyads
make the search for a home more relaxed as you can do it from the comfort of your
own home, without pressured sales speak of overly excited estate agents.