First time buyers need more help

hayley brown
hayley brown

THE Government’s decision to remove the Stamp Duty Holiday for first time buyers has left this fragile sector with little support, estate agents are warning.

The National Association of Estate Agents (NAEA) successfully campaigned for the introduction of the original Stamp Duty Holiday for properties priced at £250,000 and below. However, the exemption has since been lifted and the one per cent tax reinstated, as the Government rolls out its NewBuy Guarantee Scheme that it claims will assist home buyers.

Hayley Brown, the NAEA executive for East Anglia, said: “Since the economic downturn took hold in 2007, we have consistently called for increased support for first time buyers to aid the wider recovery of the housing market.

“Assisting those seeking property at the start of the ladder could help to generate upward momentum in the market.

“Although the latest figures from the Council of Mortgage Lenders have shown a 24 per cent rise in gross mortgage lending in May, this follows a poor performance in April. Although the average UK house price has dropped by 3.29 per cent to £226,827 year on year, just 12,600 loans were advanced in April, down 48 per cent on March data. It is likely we will see lending levels continue to fluctuate in the coming months until an adequate mechanism to support the first time buyer market is introduced and restrictive lending policies are curtailed.

“In this tough market, it is important that those who are still able to buy think honestly about what they can afford. House hunters should resist the temptation to reveal their maximum budget, leaving enough room to make additional offers if the initial one is rejected.

“If costs are stacking up, joint ownership is an alternative option. Increasingly, first time buyers are buying in partnership with friends or family - sharing the deposit, bills and Stamp Duty as well as purchase price. Both parties should sign a joint ownership agreement.

“These kinds of measures can certainly help to minimise costs and help first time buyers get onto the housing ladder. But what we need to see is much more commitment from the Government and the major lenders to help lift the barrier house hunters trying to buy, currently face,” said Hayley.