THE GOVERNMENT needs to introduce further measures to make the UK property market fairer and more inclusive, Wellesley’s chief financial officer Ian McKenzie has stated.
McKenzie said although the chancellor’s decision to abolish stamp duty for most first-time buyers was welcomed, it will not help to even out the North-South economic divide.
Stamp duty has been axed on properties bought by first-time buyers for up to £300,000, and on the first £300,000 of properties purchased for up to £500,000.
McKenzie said regional differences in house prices mean London and the South East are likely to reap the greatest benefits.
“While some of those buying in North and South Wales, where many first-time buyer houses are below the £125,000 stamp duty threshold, will benefit, it will clearly boost London and the South East to a greater degree,” he said on Thursday in a blog post on the alternative property lender’s website. “None of which will help to even out any perceived regional imbalance in the economy.”
The average saving for first-time buyers is £1,660, based on the average first home costing £200,000, but this drops outside the South and East of England where many people will save less than £1,000.
The stamp duty cut aims to help first-time buyers get a foot on the property ladder, but McKenzie argued that unless there is greater supply, house prices could increase and make the measures “counter-productive”.
He added that there are other challenges that need to be overcome, such as the size of deposit required and the mechanism by which buyers and sellers come together and form a chain.
“A large number of potential buyers are excluded from mortgages under the revised affordability rules that lenders are obliged to follow, or are significantly limited in the size of mortgages available to them,” he said.
“So it remains to be seen whether this budgetary change will have the expected result, and it is clear that further work is needed to support the market in an inclusive fashion.”