Stamp duty changes ‘push up house prices’

Labour says Tory changes to stamp duty need an accompanying increase in the building of affordable homes to have any real impact.

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Labour has accused the government of pushing up house prices with stamp duty changes – as Theresa May says the changes have saved to 16,000 first-time buyers so far.

Reforms announced in the budget see a stamp duty cut for 95% of all first-time buyers who pay it and no stamp duty at all for 80% of first-time buyers, with savings of up to £5,000.

Today (Jan 3) May is due to say 16,000 first-time buyers she says have so far benefitted from a change that “restores the dream of home ownership for people up and down the UK”.

But shadow housing secretary John Healey said the policy has the potential to drive up prices without an accompanying boost in the building of affordable homes.

“The number of young home-owners is in free-fall but under the Tories the number of new low-cost homes for first-time buyers has halved and not a single one of the 200,000 ‘starter homes’ promised has been built.

“After almost eight years of Conservative failure on housing, homelessness has doubled, home-ownership has fallen to a 30-year low and the number of new social rented homes is at the lowest level since records began – it’s clear Theresa May has no plan to fix the country’s housing crisis,” he said.

In the autumn Budget the Government abolished stamp duty altogether for first-time buyer purchases up to £300,000, and made this relief available for the first £300,000 of properties worth up to £500,000, providing help for people in higher value areas.

The government claims that more than a million first-time buyers are set to benefit in total over the next five years.

Though the policy is acknowledged as making a difference to those who can take short-term advantage of the relief, critics say affordability is still the

The Office for Budget Responsibility (OBR) estimates that the policy will only add about 3,500 new transactions – some which it says would have happened anyway.

OBR also expects that extra cash made available will filter through into higher house prices quite quickly.

 

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