New Homes Marketing Board chief says scrapping Stamp Duty for first time buyers is now urgent
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08 03 03 NHMB final stamp duty release(doc)National Homes Savings scheme and tax relief on parental contributions should also be introduced
New Homes Marketing Board Chairman David Pretty CBE is again calling on the government to scrap stamp duty for struggling first-time buyers in the March budget.
As I have said many times in recent years, existing stamp duty levels are in need of major review and I urge the Chancellor to take the forthcoming budget opportunity to get rid of stamp duty for first time buyers says Mr Pretty. It would be a welcome boost to hard-pressed youngsters and also to the wider housing market.
He added: The current stamp duty regime now represents an unfair tax on young buyers who can least afford it. The current threshold starts at 1% above £125,000 and rises to 3% over £250,000. This may have been reasonable when it was introduced, but has been savagely eroded in recent years by house price inflation.
it's a huge extra financial burden on young buyers already stretched to the limit, adding at least £1,750 to a typical first home and over £7,500 in parts of London and the South East.
Mr Pretty went on: Increasing the threshold to £250,000 for first time buyers would take the vast majority of them out of this tax trap and provide a much-needed fillip to their stretched financial resources. What's more, the threshold should be reviewed every five years to ensure it stays in line with inflation.
I believe this stamp duty burden on young buyers needs to be tackled decisively, just as it has been recently in the Republic of Ireland.
Mr Pretty says the potential price benefits of the current market slowdown which might normally ease the situation for young homebuyers may well be largely cancelled out by the recent tightening of lending criteria and reduction in funds by lenders who consider first-timers a high risk group.
Instead of creating a buyers market, the current trends could actually end up making the situation even more difficult for aspiring first timers as they will be paying much higher deposits and, quite possibly, higher interest rates he said.
Today's first-time buyers, says Mr Pretty, are worse off than any previous generation and need even more help than just the scrapping of stamp duty.
There are a number of government initiatives in place to help first-timers, but they help relatively small numbers. What we need is more general assistance on a national scale. Apart from stamp duty relief, I would like the government to actively encourage saving for deposits particularly important now that bigger deposits are required and to take up my proposal to give tax relief on parental contributions to their children's homebuying efforts.
Over half of all British first-time buyers get some sort of financial help from their parents, and without their contribution, this serious problem would be much worse. Tax relief would encourage and reward this vital source of funding he explained.
The government should also seriously consider introducing a national homes saving scheme, he says, where aspiring first time buyers are encouraged to start saving early for their deposit - as much as 5 years ahead - and their savings are boosted by a tax-free contribution from government. A similar scheme was introduced in Australia only last month,†said Mr Pretty.
As they are so crucial to our economy, it makes good economic, social and political sense to help first time buyers on a national scale and treat them as a special case. I urge the Chancellor to take this opportunity to ease their plight
For more information or to speak with David Pretty, please contact Richard Finnila or Chris Lynch at BlueIce Communications on Tel: +44 (0)20 7937 7537 or Email: rfinnila@blueicecom.com
Editor's notes:
Link toNew Homes Marketing Board
New Homes Marketing Board
The New Homes Marketing Board (NHMB) was established in 1982 by the House Builders Federation (HBF, now the Home Builders Federation) to promote their activities to consumers. The NHMB is supported by HBF members and the majority of home builders registered with the National House Building Council, as well as material producers, suppliers, and associated industries.
The NHMB also promotes the need for new housing to the general public and raises awareness of the benefits of new homes. In promoting a positive image of the housing industry's aims and activities the NHMB supports the HBF's political and media campaigns.
David Pretty - Background
The former CEO of Barratt, David Pretty was made a CBE for services to housebuilding In the Queen's Birthday Honours List 2007. He was named the UK's Regeneration Champion in the national Regeneration Awards in December 2006. Since retirement from Barratt, he has remained active in the housebuilding sector, as a Director of the Home Builders Federation (HBF), Chairman of the New Homes Marketing Board, a trustee of The Prince's Regeneration Trust and an appeal board member of Shelter, the homelessness charity. He is also a non-executive Director of McCarthy & Stone, Britain's largest provider of private retirement housing. He has, for many years, actively campaigned to highlight the causes of the housing shortage and the plight of first-time buyers. He contributes regularly to trade publications and is an occasional advisor to government on housing issues.
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