Estate agents tell ministers to stop being 'obstinate' over Stamp Duty

Thursday 16th February 2012

Estate agents have told the Government to stop being so stubborn about the Stamp Duty break for first-time buyers, after HSBC said nine in ten FTBs had not paid the tax since the exemption began two years ago.

The tax break is due to end on March 24 and has been labelled ‘ineffective’ by housing minister Grant Shapps.

But HSBC said that first-time buyers were up by one-fifth since the start of the year as they scrabble to beat the deadline. It also said that in the last two years Stamp Duty had not been paid on half of the FTB transactions which would otherwise have attracted the tax.

Peter Bolton King, chief executive of the National Association of Estate Agents, said:  “These figures are a wake-up call for the Government.

“Ministers claimed that the Stamp Duty exemption for first-time buyers failed. But property specialists, including us, have argued consistently that removing Stamp Duty makes a real difference to people struggling to get on to the property ladder.

“The Government should reverse its stubborn approach to Stamp Duty and reintroduce the exception for first-time buyers.”

According to the figures, sourced from the Council of Mortgage Lenders, of the 331,899 first-time buyer loans taken out between the start of the Stamp Duty holiday on March 24, 2010, and the end of 2011, 89% were for properties priced under £250,000.

Over this period, 286,299 first-time buyers bought a Stamp Duty-free property, with 159,872 benefiting from the Stamp Duty holiday by buying their first home priced between £125-£250,000. This is half of all of those first-time buyers who bought a home over the past two years who would otherwise have been liable to pay the additional tax.

Peter Dockar, head of mortgages at HSBC, said: “We have seen a 20% increase in approvals for first-time buyer loans in the first six weeks of the year as they rush to take advantage of the Stamp Duty holiday.

“With the deadline fast approaching, we will continue to offer a helping hand to first-time buyers. As well as offering a number of competitive deals for customers with as little as 10% deposit, we have also committed to making £3bn available to first-time buyers in 2012 whilst also offering a number of fee-free mortgages to help keep upfront costs down.”