Stamp duty will be scrapped immediately for first-time buyers of homes below £300,000, Chancellor Philip Hammond announced in his Budget. Richard Carr asks does it go far enough?
The change, effective immediately, cuts stamp duty for most first-time buyers in England and Wales. For years, stamp duty has been just another barrier to homeownership, another cost to overcome, but with this exemption the path is being made a bit easier.
Stamp duty scrapped for first-time buyers on homes below £300,000
It’s welcomed by many but has its critics – with young people saying that the ability to save a deposit is also a factor for ‘generation rent’.
Housing was billed as one of the key themes of the Budget and the Chancellor promised the next generation that getting on the housing ladder would not simply be a “dream”.
The Treasury said it amounted to an average tax cut of £1,600 for a million first-time buyers over the next five years. But the measure was quickly called into question by the Office for Budget Responsibility which said it would push up house prices by around 0.3 per cent, with most of the increase happening in 2018. Rates vary across the UK – in England, Wales and Northern Ireland it kicks in at £125,000 and in Scotland at £145,000.
Package announced to boost housebuilding
He also promised a wide-ranging package to boost housebuilding, setting a target of an annual 300,000 homes built by the middle of the next decade.
The Chancellor pledged £44bn capital investment and measures aimed at getting building projects started. Cash for house building will include a £630million small sites fund, £2.7billion to more than double the Housing Infrastructure Fund, £400m for estate regeneration, £8bn of new financial guarantees to support private house-building and an additional £34m to develop construction skills.
Among the £44bn package is a pledge to make it easier for councils to build in areas of high housing need.
Mr Hammond also threatened to intervene with compulsory purchase orders if landowners and developers are found to be holding back on building “for commercial rather than technical reasons”.
He said: “Solving the housing challenge takes more than money, it takes planning reform. We will focus on the urban areas where people want to live. Building high quality, high density homes.”
Will this help ‘Generation Rent?’
While Wednesday’s moves were broadly welcomed, many said that it would not provide enough support to make a marked difference to younger generations, who’ll still struggle to get on the property ladder.
The focus on bridging the housing generational gap lies on the all-important saving up for the deposit. The issue of housing supply and price is important, but looking at measures to support ‘generation rent’s’ ability to save a deposit is crucial.