New hope for first-time buyers?
FIRST-time buyers were offered a glimmer of hope as the Government attempted to kick-start the ailing housing market.
FIRST-time buyers were offered a glimmer of hope last night as the Government attempted to kick-start the ailing housing market.
But there was also a warning that the incentives offered did not go far enough and people may still not invest in property until there is an improvement in the country's economy.
The proposals, which come into effect today, will see homes worth £175,000 or less exempt from stamp duty for 12 months.
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The change, which relates only to buildings entirely for residential use, will raise the threshold on which the 1% tax is paid from its current level of £125,000.
The package also includes a “free” five-year loan of up to 30% of a new property's value for first-time buyers - after which they will be asked to pay a fee, although no details of this have been provided.
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The measures were welcomed last night but there was a warning that people may still not be confident to invest when the economy is so uncertain.
Stuart Clarke, chairman of the Suffolk branch of the National Association of Estate Agents, said: “The abolition of stamp duty for properties of £175,000 or under - we would welcome that with open arms. We'd also hope that after the initial 12 months the Government looks at extending it for a longer period. However what I think is likely to happen is people will use this an opportunity to save and will simply wait and see if the market drops any further - so is it really going to be beneficial?
“People are concerned that things will get worse before they get better and as a result we might not see a lot of new investment.
Mr Clarke, of Clarke and Simpson estate agents in Framlingham, added: “The 30% loan is also very useful - however we need more information as to what the fee will be after the five years.”
Richard Spring, Conservative MP for West Suffolk, welcomed the proposals but warned the situation would not improve unless people had confidence in the economy.
“I do think they're a good idea,” he said. “However people have lost faith in the economy - and that's the problem. First-time buyers will only make a substantial investment if they think they will make a profit - at the moment the assurance isn't there and people will not buy homes as a result.”
Wil Gibson, chief executive of rural charity Suffolk Acre, said any measures to help people get on to the property ladder were welcome but added there had to greater provision of social housing.
“That's where we need to put our energies,” he said. “Affordable housing is becoming increasingly important because it will compensate for the slowing down of the private sector.”
Prime Minister Gordon Brown said the package of measures - including help for first-time buyers and families facing repossession - showed the Government was taking action to help people through difficult times.
The proposals also include plans to bring forward funding for social housing from existing budgets to deliver more properties sooner,
Communities Secretary Hazel Blears said the measures were not going to “transform the world” but they were going to “make a big difference to those people that are struggling.”
Referring to first-time buyers she said: “We can't run people's lives but we can try and help. What we're saying is...we will help you get the deposit so you can get the mortgage and you can get into the housing market.”
See tomorrow's EADT for a 44-page local homes guide.