Brits want stamp duty reform

The British public are not surprisingly united when it comes to stamp duty reform … but very much divided when it comes to any changes in this year’s budget which are specifically designed to help first time buyers step onto the property ladder, according to research by GE Money Home Lending.

Keeping pace with property inflation

General opinion backs up the accepted consumer view that stamp duty bands need to be changed to keep in line with the staggering rises in property inflation as seen over the last ten years, with 71% confirming this view. However, the country differs on opinion when it comes to what changes should be made and if they should be aimed at the first time buyer, or the wider market as a whole.

A strong majority of the public (32%) think that the stamp duty exclusion band should be immediately increased from its current level (£125,000) and fixed at average regional house prices. Alternatively, 1 in 4 feel that this leap is unrealistic and that Gordon Brown should simply link the exemption band to national house price increases moving forward. Interestingly, 18% felt that Mr Brown should leave it where it is.

Sympathetic Britain?

First time buyers will be relieved to hear that 65% of the public would like Gordon Brown to help those purchasing their first home and increase the exclusion band for stamp duty. However, the rationale behind this is their concern is not necessarily unselfish. Many claim that a plentiful supply of first time buyers will sustain prices further up the chain, ensuring equity and property growth in their own home. Others cite personal difficulties when they bought as well as the future difficulties their children face.

By contrast a significant proportion of consumers are of the attitude that they coped when first purchasing a home and so why should first time buyers receive special treatment in today’s property market.

Duncan Berry, Director of Mortgage Sales at GE Money Home Lending, said: “As Gordon Brown prepares to deliver his budget, it is clear that the vast majority of consumers feel that current stamp duty bands do not work and that something needs to be done. What is also interesting is the polarised levels of empathy consumers have when it comes to the plight of first time buyers. It is important that lenders continue to understand the difficulties faced by this group, developing new and innovative ways of helping them to get onto the housing ladder.

“House price inflation remains a key concern for everyone in the UK, with many property owners wanting to safeguard the equity in their own homes, which clearly strengthened by growth in the first time buyer market. Despite this, and the clear need for action to be taken on current stamp duty thresholds, it is interesting to see that over a quarter of the public do not believe that first time buyers should be given any more help that they received when purchasing their first property.”