In the Spring Statement Hammond said that an estimated 60,000 first-time buyers have benefitted so far from the abolition of stamp duty for first-time buyers of homes under £300,000; and the relief of up to £5,000 on stamp duty for properties up to £500,000.
However, Nimesh Shah, partner at accounting, tax and advisory practice Blick Rothenberg, questions the original figures: “The first-time buyer relief is worth up to £5,000 saving in SDLT. Based on the Chancellor’s claim, the first-time buyer relief has cost the Treasury up to £300 million in just under four months since its introduction. At the current run-rate, it will cost the Treasury close to £1 billion in the first year.
“At the Autumn Budget, the Treasury estimated the 2017/18 cost to be £125 million, and by 2022/23, £670 million. Today’s claim by the Chancellor that 60,000 first-time buyers have already benefitted suggests that the Government’s original figures were significantly under-estimated.”
Shaun Church, director at mortgage broker Private Finance said the cut to stamp duty might be helping first-time buyers but what about second-time and subsequent buyers?
Church commented: “Existing homeowners have been left out in the cold. With no sign of stamp duty reform for those further up the ladder, the prohibitively high cost of moving is continuing to dampen activity at the upper end of the property market.
“While this might not seem like a problem for ordinary buyers, a healthy market requires plenty of movement at all rungs of the ladder. A blockage at the top will have a trickle-down effect, as those who want to upsize may struggle to find any properties available, which will in turn impact those further down the chain.”
Jeremy Leaf, north London estate agent and a former RICS residential chairman, agreed: “The stamp duty concessions have definitely prompted more interest among first-time buyers, who are often taking the place of investors at the lower end of the market.
“But further help is needed to make a real difference, not just at the bottom end of the market but right through to the top end if we are to achieve genuine growth.”