The budget 2017 - Stamp duty cut for FTB's
Housing had been 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 be just a "dream". He has cut the stamp duty paid by first time buyers meaning that 95% of all first-time buyers will benefit, with 80% not paying any stamp duty at all. He has also promised that the government would deliver 300,000 new homes a year and has pledged £44bn capital investment with measures aimed at getting building projects started.
Among the £44bn package he has pledged to make it easier for councils to build in areas of high housing need. There was also a threat to intervene with compulsory purchase orders if landowners and developers were found to be holding back on building "for commercial rather than technical reasons".
He added: "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."
Summary of changes to stamp duty & housing.
- Stamp duty to be abolished immediately for first-time buyers purchasing properties worth up to £300,000
- To help those in London and other expensive areas, the first £300,000 of the cost of a £500,000 purchase by all first-time buyers will be exempt from stamp duty, with the remaining £200,000 incurring 5%.
- 95% of all first-time buyers will benefit, with 80% not paying stamp duty
- Reduction will apply immediately in England, Wales and Northern Ireland although the Welsh government will have to decide whether to continue it when stamp duty is devolved in April 2018
- It will not apply in Scotland unless Scottish government decides to follow suit
- £44bn in overall government support for housing to meet target of building 300,000 new homes a year by the middle of the next decade
- Councils given powers to charge 100% council tax premium on empty properties
- Compulsory purchase of land banked by developers for financial reasons
- £400m to regenerate housing estates and £1.1bn to unlock strategic sites for development
- Review into delays in developments given planning permission being taken forward
- £28m for Kensington and Chelsea council to provide counselling services and mental health support for victims of the Grenfell fire and for regeneration of surrounding area
- New homelessness task force
We are delighted that the government is trying to help first time buyers to get on the housing market but stamp duty is more of an issue in London and the south-east where prices are at their highest. In our area the average price a first time buyer will pay is still below the £125,000 threshold so homes still change hands tax-free.
While the stamp duty cut would be welcomed by some, it did not address the biggest barrier for first-time buyers “which is the level of income required to pass lender affordability tests”.
Our main concern for the housing market is a lack of new houses creating a shortage of homes that in turn drives up prices. Unfortuntely these measures don't go far enough to fix this huge problem.
Posted on: 22 November 2017