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CML disappointed over end of stamp duty holiday

CML disappointed over end of stamp duty holiday

Category: Mortgages

Updated: 30/11/2011
First Published: 30/11/2011

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The Council of Mortgage Lenders (CML) has expressed its disappointment at the confirmation that the stamp duty holiday for first time buyers will end next March.

A continuation of the scheme had been urged, but it was confirmed that the relief would come to an end on 24 March 2012 as planned.

The temporary holiday had been introduced to encourage first time buyers to the market, and exempted them from paying a 1% stamp duty on properties worth less than £250,000.

However, the initiative has not resulted in large numbers of buyers coming to the market with the Government describing the holiday as being 'ineffective'.

Data from the Office for Budget Responsibility shows that the first time buyer market is expected to continue to struggle in the coming years.

The Government said it will look to prioritise schemes that offer better value for money.

These will include the mortgage indemnity scheme that was officially announced in yesterday's August Statement, which will allow around 100,000 first time buyers to secure a home with a deposit of only 5%.

The CML is worried that the impending end of the holiday could see a rush to secure homes before 24 March next year, as was the case in 2009, when the previous stamp duty concession came to an end.

"It is disappointing to see the government withdrawing the stamp duty concession that currently benefits first-time buyers," said Paul Smee, director general of the CML.

"While the concession may not have stimulated additional demand, it was a significant help to home-owners entering the market and its removal runs counter to the themes of the new housing strategy.

"It is likely that we will see a bunching of eligible first-time buyer transactions early next March to beat the expiry date on the concession."

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