Peter Bolton King,

National Association of Estate Agents

The Chancellor announced that he is freezing stamp duty at its current levels. However, with inflation at 2.4% and house prices continuing to rise annually, he is effectively increasing the number of homebuyers who are now liable for this tax. Figures from the Inland Revenue reveal that £3.59bn was raised from stamp duty in 2003/04, up 330% compared to £830m in 1999/00.

The Government has once again ignored calls from the NAEA along with the rest of the property industry and the general public to bring stamp duty rates and thresholds in line with the housing market in the 21st century. Major adjustments are needed to these levels to ensure the tax is a fair one and remove what is now a serious barrier to first time buyers looking to get onto the property ladder.

Ray Boulger,

Charcol

While it is disappointing that stamp duty remains an unfair tax it is good news that it has not been increased. The last time the starting point for stamp duty was increased was back in 1993, when it was increased from £30,000 to £60,000. Since then house prices have risen by 167%, and increased by 129% since 1997 when the current tiering system was brought into effect.

This tax has become one of the Chancellor’s biggest stealth taxes and is now hitting hard many first time buyers and other homeowners that it was never targeted at.

Before today’s budget we called for an above inflation-linked increase in the IHT starting threshold to at least £500,000.

Today’s increase of 3% to £263,000 is only a gesture. It falls far short of what we feel is needed and means that millions of homeowners are still being thrust over the threshold and face a 40% tax bill simply for owning their own homes.

David Bitner,

The MarketPlace at Bradford & Bingley

We believe the Chancellor has really missed an opportunity to help the beleaguered first time buyer by not updating the stamp duty bands. It was never designed to take money from first time buyers, yet it now affects a vast proportion of them and is seriously hampering their ability to get a foot on the housing ladder.

The average first time buyer now has to find over £900 to pay this tax, at a time when most are struggling to even fund a deposit. With the number of first time buyers entering the market at an historical low, just 29% in 2003 compared to 42% just two years before in 2001, this is likely to have serious implications for the market as a whole.

Peter Williams,

Council of Mortgage Lenders

The recommendations will take time to digest. At first sight, it is disappointing that the report seems ambivalent about the role of home-ownership within the overall UK housing market. But the themes of making the housing market more flexible, and the reference to the blurring of the boundaries between the market and social sectors, do chime with the CML’s desire to see a much more flexible tenure structure to meet the needs of people who cannot afford full home-ownership.

Of course, the primary problem – delivering a far higher supply of housing – is highly political, and it will take some time to implement change in practice. In the meantime, as the report highlights, there is a large swathe of people who cannot afford to become homeowners. Some targeted help for this group need not be expensive in terms of public expenditure and would provide at least a stop-gap policy response until the increased supply of housing begins to flow through.

Adrian Coles,

Building Societies Association

The review into housing supply by Kate Barker has come up with some radical suggestions. We welcome the Government’s commitment to consult on these proposals. It is clear that with changing lifestyles, for instance more single households, we will require increased housing supply in the future as people are already priced out of the market. If the housing market is to remain sustainable this issue needs to be tackled now.

As people’s homes are worth more and more, their estates are caught by inheritance tax. We welcome the Chancellor’s decision to raise the limit to £263,000 which will ensure that 95% of estates are not caught by this tax.”

The amount of money going into the Treasury from stamp duty has tripled since 1997. We welcome the Chancellor’s decision, as far as it goes, to leave levels as they are, but a cut to recognise the pressure on first time buyers would have been more sensible. Homeowners are already paying twice the EU average in property-related taxes.

Jeff Knight,

GMAC RFC

By making way for introduction of property investment funds, the Chancellor will be boosting the buy-to-let market and the building of new houses, in line with the Barker Report. This can only be good news for would-be homeowners who are trying to enter the market but there is more to the issue of supply and demand.

There is much talk of first time buyers not being able to enter the market but we believe the problem may well be higher up the ladder with potential second time buyers holding up the progression.

There is a funnel-neck of potential second time buyers who are unable to move up the property ladder. There are two possible reasons for this inertia – not enough available properties and/or an increasing gap between the ‘starter’ home and the second home.