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Stamp duty holiday extension urged

Stamp duty holiday extension urged

Category: Mortgages

Updated: 13/11/2009
First Published: 13/11/2009

MONEYFACTS ARCHIVE
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The Government has been urged to extend the stamp duty holiday currently scheduled to end in December or risk damaging the recovery in the housing market.

Since September last year, a temporary stamp duty threshold of £175,000 has been in place, up from the usual level of £125,000, as part of the Government's attempts to encourage people to move and to breathe life into a struggling housing market.

Earlier this week, the Council of Mortgage Lenders revealed that since the concession was introduced, an estimated 132,500 house purchase mortgage transactions had escaped paying the tax, amounting to around 27% of the house purchase loans approved in that time.

The National Association of Estate Agents (NAEA) has now said its members have reported a year on year increase in first time buyers, accounting for 22% of the market in October this year, up from just 10% in the same month in 2008.

Calling first time buyers the critical foundation level of the housing market, Gary Smith, president of the NAEA, said that both sets of figures revealed first time buyers were returning, and demonstrated the tentative recovery that was under way.

"The danger is that this short-sighted policy could precipitate an unwelcome pause in the housing market at the start of the new year," he added.

"We can only hope that common sense will prevail and that the Government will raise the lowest level at which stamp duty will apply to £175,000 for an indefinite period."

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