Abbey: Stamp duty holiday extension

Nici Audhlam-Gardiner, Director of Mortgages at Abbey, said: "The Government's extension to the stamp duty ‘holiday' for properties up to £175,000 until the end of the year is welcome relief for struggling first time buyers but it's disappointing that it doesn't go further.

"The Government should be doing more to help first time buyers - ideally through a permanent increase to the nil rate threshold - or at the very least, by making stamp duty incremental, so it works like income tax. The current slab taxation system is unfair as it means that if a person falls into a higher threshold, even by just a few pounds, they pay the higher rate on the whole amount. For example, if a buyer pays just £1 more from £249,999 to £250,000 - their stamp duty mores than trebles from £2499.99 to £7500. This penalises all buyers, but for first timers who are already struggling, it adds to the burden. In particular, those in London and the South East are most likely to find they fall into the 3 per cent tax band. And this is on top of the need to save for a deposit which is crucial if they are to get on the ladder.

"Our research shows there are more than 3.8 million potential first time buyers trying to get onto the property ladder. To help them, Abbey offers products such as our First Home Saver, a savings account paying 5.00 per cent gross p.a./AER variable to prospective first time buyers saving a deposit to get onto the property ladder. We also have a range of first time buyer mortgages, including a market-leading 4 year fix."