If Chancellor Philip Hammond thought his Stamp Duty cut for first time buyers announced during yesterday’s Budget would get a unanimous thumbs up, then things definitely aren’t going to plan.
Firstly Robert Cote, Chairman of the Office for Budget responsibility, revealed that his organisation thought the tax cut would push up prices by 0.3% and that “the main financial gainers will actually be people who already own properties, rather than first time buyers themselves”.
Treasury Chief Secretary has subsequently dismissed the OBR’s prediction and just a “minor increase”.
But Mark Hayward, Chief Executive of the National Association of Estate Agents (NAEA) (pictured, left) also sounded a note of caution saying that although overall it was a positive move, it would increase house prices by pushing up demand for first time buyer properties.
“We have seen this in areas where Help to Buy is offered, as it attracts a great deal of interest from first time buyers,” he said.
Sarah Beeny, TV presenter and founder of online agent Tepilo (pictured, right), also weighed in, saying she thought the measures would not make a huge difference to the market.
“Cutting stamp duty for first time buyers is unlikely to do much – the majority of first time buyers don’t pay anything or only a small amount presently, so it won’t make a huge difference to the masses,” she told The Express.
“The only people it will really help are first time buyers purchasing high worth properties, who already have the funds to do so.
“Essentially, it strikes me as a bit of a PR stunt designed to generate headlines, but something that will actually make very little difference to the market.”
Surveyors weren’t impressed either – Lewis Johnston, RICS’ Parliamentary Affairs Manager (pictured, left), said the thought “scrapping Stamp Duty for first-time buyers may stimulate activity at a time when the market is subdued, but this does not tackle the underlying problem and is something of a distraction from the need to increase supply”.
Alison Platt, CEO of Countrywide (pictured, right), however, didn’t think the Stamp Duty cut went far enough.
“It is activity among movers that is most critical to the growth of transactions in the wider housing market,” she said. “While first time buyers face affordability issues, so do movers and without making it easier for these second steppers to move on the supply of property to buy will always be limited, adding more to price pressures.”