Mortgage experts are calling for stamp duty reform and increased homebuilding as part of the Budget tomorrow.
Yorkshire Building Society chief economist Andrew McPhillips says stamp duty in its current form pushes up cost for buyers, worsening affordability problems.
He says: “Levying the charge against sellers rather than buyers will help to reduce costs for first-time buyers, helping more people to get on the property ladder. It would also help those moving up the property ladder, enabling them to move to a more suitable property and potentially freeing up smaller homes for first-time buyers to purchase.”
Jeremy Leaf & Co founder Jeremy Leaf agrees.
He says: “Help for downsizers and first-time buyers by way of stamp duty concessions would stimulate more transactions.
“If sellers rather than purchasers pay stamp duty, activity will increase. This is especially if housebuilding picks up too – bearing in mind the increasingly high proportion of first-time buyers who pay stamp duty currently, around 75 per cent, compared with just over half in 2006.”
Legal & General Mortgage Club director Jeremy Duncombe also calls for stamp duty reform in the Budget.
He says: “By using stamp duty incentives to free up additional housing supply, the Government can help ensure families have more access to the larger homes they need and that smaller properties are available for first-time buyers.”
Mortgage market insiders also say homebuilding should be a focus in the Budget.
Leaf calls for more homes to be built, but also for the Government to pay attention to falling transaction levels.
He says: “Everyone knows we’re not building homes fast enough despite recent improvements. But just as worrying is the fall in transactions over the past 12 months, which is having a detrimental on effect on the rest of the economy.
“London has been bearing the brunt of the loss but it is the engine driving the national economy and principal source of taxation revenues, so the Chancellor will not want the situation to continue for too much longer.”
McPhillips also thinks the Government should build on their recent housing white paper and increase supply.
He says: “Although this would help to alleviate some of the effects of the housing crisis, it does not address the root cause which is the lack of supply. The Government should implement the proposals in their recent white paper and go further to boost housebuilding so that there are enough properties available for people to buy.”
But technology firm Habito chief executive Daniel Hegarty says there are positives to be found in the Government’s recent housing policy.
He says: “Last year’s Autumn Statement and the recent housing white paper have shown the Government is not just acknowledging the housing shortage, but taking much-needed action to solve the issue.
“We need to see Chancellor Hammond put his money where his mouth is and either extend or introduce new help-to-buy or shared ownership schemes. It is key to ensuring the long-term homebuilding strategy reaches first-time buyers and families who have been left out of the windfall created by London’s surging valuations.”