BSA: Budget moves us in the right direction

Mortgage Introducer

November 22, 2017

Today’s Autumn Budget is a step in the right direction – even though stamp duty still punishes homemovers and many of the proposals will take years to get going.

That was the view of Andrew Gall, chief economist at the Building Societies Association.

Gall said: “Much of what the Chancellor said moved the housing debate in the right direction.

House prices rise in the UK but London sees slowest growth

“It is too soon to know whether the permanent abolition of stamp duty for first-time buyers will have the desired effect and truly help cash constrained young people get on the housing ladder.

“Typically, these buyers will still have to save a deposit of between £15,000 and £30,000. The behavioural response of sellers could scupper the advantage if they simply increase the price of the property.”

But he added: “Our data shows that stamp duty is a much bigger barrier for homemovers than first time buyers.

“There was nothing specific in the Budget for them or indeed for older borrowers looking to downsize.

“Some are constrained by the lack of suitable homes.  A lack of housing supply remains the single most important market issue we face.”

The proportion of homeowners saying stamp duty is a barrier to buying a property increased from only 17% in 2012 to 38% in 2017, so scrapping it may prove to be a popular policy.

Gall was also pleased with proposals to boost housing supply, even though they may take years to get going.

He said: “The allocation of up to £44bn for housing infrastructure is a critical precursor to larger scale development.

“The commitment to explore housing guarantees with a figure of £8bn mentioned was useful and could help smaller developers.”

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