Philip Hammond announced the stamp duty reserve tax (SDRT) has been scrapped on all homes valued up to £300,000 for first time buyers in the Budget 2017 today.
But experts in the field are less than impressed with the move – with many dubbing it a hollow promise.
TV star and owner of estate agent Tepilo Sarah Beeny doesn’t believe Hammond’s proposals will make much difference to the property market in the UK – or house prices.
She told Express.co.uk: “I’m glad the Chancellor made housing a key focus in his budget today, but in my opinion, most of what I’ve heard won’t make a huge difference.”
Martin Lewis spoke on LBC as the Budget was being announced, and the TV star questioned whether or not people would benefit from the stamp duty exemption if they were buying with someone who had already owned a property. This still hasn’t been clarified.
Stamp duty holiday
Talking about today’s stamp duty announcement, Sarah said: “Cutting stamp duty for first time buyers is unlikely to do much – the majority of first time buyers don’t pay anything or only a small amount presently, so it won’t make a huge difference to the masses.
“The only people it will really help are first time buyers purchasing high worth properties, who already have the funds to do so. Essentially, it strikes me as a bit of a PR stunt designed to generate headlines, but something that will actually make very little difference to the market.
“A reduction in stamp duty for second steppers and downsizers would make a much bigger difference, allowing people to move up and down the market more freely and cost effectively – and freeing up first-time buyer and family homes for the right people.”
We hear these promises every year and in reality, little is done
Building more homes
Sarah said: “The Government’s pledge to build more new homes is a welcome move, but we hear these promises every year and in reality, little is done.
“And although the number of homes built last year is at its highest level since the crash, the number of houses being built is still below pre-financial crisis levels. This must change.
“Making use of urban land around high transport hubs to build new homes is a welcome move, but I’d like to see the Chancellor making a commitment to creating set numbers of affordable homes every year.
“The Government should commit to only selling off public land for the development of affordable housing, with a special price cap on all those properties to keep them affordable.
“What currently often happens is that only a small percentage of a supposed affordable housing development is allocated as ‘affordable’, and then they don’t stay affordable for long due to rising house prices – so only the first owners benefit. To stop this, the Government should cap the prices of affordable houses in line with the salaries of the local area.
“This would stop tokenism and ensure that affordable housing remains affordable.”
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Stamp duty: Sarah Beeny has called Hammond’s reform as a PR stunt
Founder and CEO of eMoov.co.uk, Russell Quirk, said he believed today’s pledge was a “story” he’d heard before and was one that hadn’t been fulfilled.
He explained: ”Today’s budget has amounted to little more than the annual dose of rhetoric and empty announcements of bold plans, extolling a robust intent to build more housing.
“The Treasury’s ‘pledge’ to build more homes is a story we’ve been told many times before, but these well-worn, heady platitudes have not been fulfilled since way, way back in 1969 when the Beatles were topping the charts.
“The likelihood of hitting the ambitious target of 1 million homes by 2050 is slim, to say the least, and one that is unlikely to be hit.
“The ‘urgent’ review of the gap in planning permission and the actual building of houses is also far too little too late and should have been implemented many budgets ago.
“The Government must actually execute on a housing plan if the current housing crisis is to be remedied and not just grab headlines with their unqualified so-called intentions. This problem is not just about money. It’s about action and it’s about listening to experts within the industry for once.”
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Stamp duty: Houses up to £300,000 will have the stamp duty scrapped for first time buyers
“A cut in stamp duty for first-time buyers is the only real sign of good intent by Chancellor Hammond and one that may help reignite the property market momentarily, but some may say acts as yet another diversion from the elephant in the room of a continued failure to build a meaningful number of affordable homes. Indeed a cynical electoral bribe.”
Benson Hersch, CEO of the Association of Short Term Lenders (ASTL), echoed these sentiments.
He said: “The Chancellor’s announcement that the Government will facilitate the building of 300,000 new homes a year, is welcome but ultimately we have heard promise after promise from successive Governments on house building, to little effect.
“Without a significant increase in social housing this is a pipe dream, especially as current figures include permitted development (offices to flats for example) rather than ‘ground up’ building.
“For many, a house to call their own remains out of reach as the deposits required are still too high. Recent analysis undertaken by the ASTL of our membership shows that bridging loans are increasingly popular forms of finance for people looking to purchase their own homes.
“Such a trend demonstrates how alternative forms of finance are increasingly providing the solutions where Government should be and could be bridging the gap.”
Jean-Marc Vandevivere, previously head of residential at British Land and now chief executive at start-up housing developer PLATFORM_, said exempting first-time buyers will do little to support housing delivery and only help the well-off.
He added: “A stamp duty cut for first time buyers is understandable politically and the reality is it’s unlikely to hit the Treasury’s coffers too hard.
“But the fact is, while maybe stimulating the lower end of the for sale market, it won’t encourage the building of new housing and will only really benefit those wealthy enough to be able to save for a deposit. Instead the Chancellor should have reversed the stamp duty surcharge for institutional investors.
“It would have made less headlines, but would have built more homes.”