The Council of Mortgage Lenders has called on the Government to extend the stamp duty holiday beyond March 24 in this month’s Budget.
Chancellor George Osborne is set to give his Budget statement on March 21. In November’s autumn statement, he said there will be no extension to the stamp duty holiday as he does not feel it has been effective.
Since March 2010, first-time buyers buying a home worth up to £250,000 have not had to pay stamp duty.
When the holiday comes to an end later this month, borrowers will go back to paying no tax on purchases up to £125,000. Borrowers with purchases of between £125,000 and £250,000 will pay 1 per cent of the price. This rises to 3 per cent for purchases between £250,000 and £500,000, 4 per cent between £500,000 and £1m and by 5 per cent for £1m or more.
In its fortnightly newsletter, published last week, the CML warned against removing the concession and called for the Government to reform the “slab” structure of stamp duty, saying that it “distorts housing market decisions and impedes labour mobility”. It says: “At a time of economic fragility, the loss of the stamp duty concession risks having a disproportionate negative effect on household sentiment, which we believe would be best to avoid. Longer term, more fundamental flaws that persist in the structure of stamp duty need to be addressed.”
The CML also called on the Government to introduce fiscal measures to improve and optimise the use of the UK’s existing housing stock and called for measures to promote institutional investment in mortgage assets to boost the number of private rental properties.
London & Country associate director of communications David Hollingworth says: “Stamp duty reform is on everyone’s wish list but I cannot really see it happening any time soon.”