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Brown fails to carry FTBs over threshold

Mortgage experts and opp-osition politicians have attacked the Chancellor’s increase in the stamp duty threshold to 120,000 as offering nothing to most first-time buyers.

Industry bodies, lenders and brokers say Gordon Brown threw away an opportunity in his Budget on Wednesday afternoon to reform anomalies and price barriers which have been created by the way that stamp duty is collected.

Figures from Halifax show that the stamp duty threshold would currently be 156,900 if it had been increased in line with the rise in house prices since March 1993 which was the last time that the duty threshold was raised.

Liberal Democrat leader Charles Kennedy says the threshold increase this week falls short of the average 131,000 price paid by first-time buyers.

Abbey chief economist Barry Naisbitt says a graduated system where buyers pay tax only on the excess of the 120,000 limit would treat homebuyers more fairly and get rid of artificial price barriers around tax thresholds.

The increase in the zero-rate threshold from 60,000 to 120,000 has been hailed as a step in the right direction by many brokers but they say it does little or nothing to help most first-time buyers in the South-east and London where the average property price is 284,633.

Savills Private Finance associate director Melanie Bien says: “Gordon Brown could have made more of an impact by overhauling the current system. This would make the tax much fairer, benefit a far greater number of homebuyers and give the housing market the kickstart it needs.”

Mortgage Express chief economist Peter Charles say: “We are sceptical about this as unfortunately it does not affect many numbers. This is only of benefit to a small number of first-time buyers. This Budget does nothing to get the housing market moving.”Budget 2005 coverage, p2, 3, 5

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