Chancellor Alistair Darling has not extended the Stamp Duty holiday, meaning the temporary threshold of £175,000 will expire in January and return to its previous limit of £125,000.
However, with unemployment still likely to rise, Darling said it would not be right to
withdraw all support for homeowners.
He added: “Last year, I improved the Support for Mortgage Interest scheme to provide better cover for mortgage interest payments for those who had lost their jobs. Over 220,000 people have been helped so far. I have decided this additional support will be extended for a further six months.”
The only other good news for the industry came in the shape of a further £5m of
funding for Citizens Advice Bureaux to allow them to open their doors for longer.
David Harker, chief executive, said the cash injection acknowledged the increased demands
on the service caused by the recession, the majority of which are property-related. But Darling’s failure to extend the Stamp Duty threshold holiday caused considerable consternation in the mortgage market.
Adrian Coles, director general of the Building Societies Association, said the tax
is in urgent need of serious reform.
He added: “It is disappointing that the Chancellor has not extended the Stamp
Duty holiday for properties under £175,000. With the average house price now standing
at £162,764, according to Nationwide Building Society, extending the holiday would have provided much needed relief to many first-time buyers aspiring to get a foot
on the housing ladder.”
The National Association of Estate Agents claimed the Chancellor had “missed an open
goal” with his statement.
Chief executive Peter Bolton King explained: “By ignoring the advice of much of the property industry, there is a real danger that the property slump that has hit thousands of families over the past 12 months will hit thousands more, harder, in the year ahead.
“Stamp Duty unfairly distorts the property market, as it is prohibitive to people looking for a step up the housing ladder and unfairly penalises people investing in buy-to let portfolios.”
Shadow chancellor George Osborne described the PBR as a “catastrophe”. He said: “We were promised a pre-Budget report and we got a pre-election one. No one will believe a word they [Labour] say on the economy again.
