First-time buyer stamp duty holiday would assist 43% of sales
If the Chancellor froze stamp duty for first-time buyers on properties up to £250,000 almost half (43%) for sale in major UK towns and cities would be exempt from the property tax.
That was according to research from online estate agents HouseSimple.com
Looking at the number of properties currently for sale in 80 major UK towns and cities, and the number of those properties that are on the market for £250,000 or less, in 15% of these towns more than 90% of properties would be stamp duty exempt.
And in almost half (45%) of these towns, three quarters of properties would fall into the 0% stamp duty band.
If the 0% threshold was raised to £250,000, 90% or more of properties currently for sale would be stamp duty exempt for first-time buyers in a dozen UK towns and cities, including Liverpool and Sunderland, for example, and 20% of properties currently for sale in London, Oxford, Cambridge, Guilford, Brighton, Bath and Watford.
In London only 2.4% of properties for sale would be stamp duty exempt for first-time buyers if the threshold raised up to £250,000.
Alex Gosling, chief executive of HouseSimple.com, said: “No-one is quite sure what Mr Hammond’s plans are other than a stamp duty freeze for first-time buyers is on the cards.
“It’s unlikely that he will give first-time buyers carte blanche by removing the zero percent threshold altogether, as we could end up seeing a lot of very expensive properties being bought while the exemption is in place.
“It’s more likely the Chancellor will raise the zero percent threshold to benefit the majority of first-time buyers who are on average salaries and are looking to purchase properties below the average UK house price.
“The last time the threshold was raised to £250,000 it had the desired effect of freeing up the market, so there’s every chance Mr Hammond will do something similar. This is probably not the time to be overly charitable and raise the 0% band to £300,000 or even higher to the level of average London house prices.”
If the 0% threshold was raised to the average UK house price of £226,367 more than a third (37.9%) of properties would be stamp duty exempt, while if the 0% threshold was raised to the average London house price of just under £500,000, more than two-thirds (69.3%) of properties currently on the market would be exempt for first time buyers.
If Philip Hammond was to raise the 0% stamp duty threshold to £250,000, he would be following in the footsteps of a previous Chancellor.
In March 2010, Alistair Darling announced a two-year stamp duty holiday for first-time buyers up to £250,000.