Chancellor George Osborne has not extended the Stamp Duty holiday for first-time buyers despite massive lobbying from the mortgage and estate agency industries.
The decision has provoked fury, with critics saying that the Government had not meant what it said about kick-starting the housing market.
The Government, however, says the Stamp Duty break has proved “ineffective” and it will end, as planned, on March 24. It intends to produce proof of how it has not worked.
The RICS warned that ending the Stamp Duty holiday could distort the market with a mini boom and bust.
It said: “By choosing to end the relief in four months rather than immediately, there is a clear risk that there will be a spike followed by a dip in the housing market as buyers rush to take advantage of the relief before March.”
It said it was “hardly surprising” that the Stamp Duty break had failed to help first-time buyers, given the lack of affordable mortgages and homes on the market.
In walking away from the Stamp Duty concession, the Government will instead concentrate on other measures announced in its new housing strategy, notably its controversial mortgage indemnity scheme on which it has now unveiled a few more details.
The Chancellor revealed that the Government will underwrite the 95% mortgage scheme, which is available only for new-build purchases, by up to £1bn.
The Autumn Statement said: “The Government will take on a contingent liability which will build up in line with purchases under the scheme, to a maximum of £1bn.”
Under the scheme, taxpayers will be responsible for 5.5% of the value of each home purchased. Builders will put 3.5% of the value of each home sold under the scheme into a funding pot, which will be called upon by lenders if the properties are repossessed at a loss.
The initiative aims to help 100,000 households purchase a new-build home with a 5% deposit.
But it is unclear how many first-time buyers have succeeded in getting on to the housing ladder because of the current Stamp Duty holiday, although evidence is that they have melted away.
According to the National Association of Estate Agents’ latest and possibly ill-timed report, the proportion of first-time buyers fell to just 16% in October from 23% the month before – despite the Stamp Duty holiday exempting first-timers on purchasers of up to £250,000.
The Government says it will publish analysis showing that the tax break has not helped boost first-time buyer numbers.
Calls to extend the break had come from various organisations, including the Council of Mortgage Lenders, Nationwide, Legal & General and others.
The NAEA said there was little in the Autumn Statement to give comfort to the property industry, while Robin King, director of asset management firm Movewithus said the Chancellor had failed to tackle the “first-time buyer crisis”.
He said the mortgage indemnity scheme would be of little help to most people, and said the Government should have tackled lending practices.
Veteran estate agent Trevor Kent said that taking away the Stamp Duty break was a 'kick in the teeth' for first-time buyers now faced with having to find £2,500 on top of their 'inflated deposits', simply for the 'privilege of paying for a roof over their heads'. He said that it would make the difference between first-time buyers deciding to move or stay put.
Peter Rollings, CEO of London estate agents Marsh & Parsons, accused the Government of giving with one hand and taking away with the other.
He said: “The failure to extend the holiday for first-time buyers will undermine the Government’s own attempts to kick-start the first-time buyer market across the country.
“While the new mortgage indemnity scheme may improve the accessibility of mortgage finance to many credit-worthy borrowers, first-time buyers will need to save for longer to pay the Stamp Duty bill as they move.
“If the Government aimed to stimulate the national first-time buyer market in spite of the wider economic conditions, combining the extension of the Stamp Duty holiday with the new indemnity scheme would have boosted the chances of a significant increase in first-time buyer activity. In effect, Osborne is giving with one hand and taking away with the other.
“But the Chancellor has also missed an open goal by failing to address the outdated and iniquitous Stamp Duty tax system.”
CML director general Paul Smee said: “It is disappointing to see the Government withdrawing the stamp duty concession that currently benefits first-time buyers.
“While the concession may not have stimulated additional demand, it was a significant help to home owners entering the market and its removal runs counter to the themes of the new housing strategy. It is likely that we will see a bunching of eligible first-time buyer transactions early next March to beat the expiry date on the concession.”
Grenville Turner, chief executive of Countrywide, the UK’s estate agency and financial services chain, also said he was disappointed at the ending of the Stamp Duty holiday – and cast doubts on whether the mortgage indemnity scheme would really deliver.
He said: “It is disappointing that the Chancellor did not take the opportunity to extend the Stamp Duty holiday for first-time buyers and has instead added another barrier for first-time buyers to get on to the property ladder.
“A positive antidote to assist the vast majority of home movers and the resale market would have been a Stamp Duty holiday for all home buyers up to £250,000.
“Whilst the measures announced in the Government’s housing strategy are a step in the right direction, they only scratch the surface of the fundamental issues that have restricted the housing market in recent years – housing supply and the high level of deposits required.
“The prediction that 100,000 families will benefit from the Mortgage Indemnity Scheme may be optimistic, as we are yet to hear the detail of whether it enables lenders to offer cheaper rates.”
Charles Haresnape, managing director of Aldermore Mortgages, said: “First-time buyers need as much help as possible and the reintroduction of Stamp Duty on purchases below £250,000 will be a significant disincentive.”
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Comments
rich: "Do u look like a big black pot??"
If that is the way you would like to envisage me, then feel free - you have my blessing.
I've been called worse. MUCH worse.
(Gotta admit to being just a tad worried that you are fantasising over me, though. Surely the time could be put to better - and less scary - use coming up with THAT solution to benefit your micro-market... ? ;o) )
Pee Bee::: You said "Every second you spend typing your annoyance here is time you could have been coming up with a solution that would benefit YOUR micro-market..."
Do u look like a big black pot??
@Sibley's B'stard Child
yes mate, oddly i have missed you bit
Jonnie
Puzzled: "Pee Bee: "I wonder what it (Stamp Duty) will be in twenty years...?"
I was referring to the THRESHOLD, not the %age rate or the revenue generated by its collection, Sir.
Twenty years AGO (sorry - using the history shenanegans again... ;o) ) the lower threshold was £30,000 - it is now £250,000 (but will of course reduce back to £125,000 in March 2012).
So - the threshold has slightly over quadrupled in 20 years. House prices, on the other hand, are only 3.03 times higher (Nationwide figures) than Q3 of 1991.
A reason to increase the threshold? Or, as I have suggested in order to avoid all this anal thinking about thresholds - one size fits all?
Nothing really to do with anything - but I know from our previous that you come from a construction/civils background.
May I ask what is your line of business now? I'm just an inquisitive sort, really... ;o)
Hallo there Jonnie, long time no see.
Has everyone been missing my sage words of advice then?
IO, I disagree, I believe we will see a surge of transactions in March followed by a slump in April 2012.
After all, it happened in December 2009 when the govt (temporarily) stopped the SD holiday (for props under £250k and it happened again in April 2011 with the changes to £1 million+ property.
True, there are x amount of would-be-buyers that can't secure mortgages but there are still enough low-LTV and cash-purchasers to effect another mini boom and bust in transactions next year.
Sort of a union / militant feel brewing today?
Just seen that bit on the BBC about Clarkson winding the unions up about having them shot, then here we are on here with Rant talking of picketing EA’s and its got me thinking……………..
………..Rant, the walk out yesterday was lots of people having a day off instead of doing whatever they do all day in the ‘public sector’, they are normally found (when not taking sick leave that is several times level of the private sector) busily being busy but yesterday was their day to ‘walk out’, to make a stand and to tell their employers how cross they are mainly by clogging up Bluewater Shopping Centre but never the less it was a STRIKE
Now, you can’t do this with BRIT and Sibleys (where is he these days?) etc as you don’t / wont / cant do business with EA’s so based on that you cant stop doing business with EA’s because you haven’t started to yet?
And, while im here the FTB stamp duty thing – all nonsense, wont make a jot of difference, it was only last week that it was said only 16% of buyers are FTB’s and most of them will be buying under the minimum threshold so with some old school PeeBee maths (when you are ready Peebs) we know that it only benefits the odd FTB buying in the south / London and this lot has plenty of dosh, yes they might need to cancel the 2 week holiday nest year and give it to the chancellor but it makes as much difference as a fart in a hurricane
And finally – BRIT1234 – as Wardy pointed out for a lad that hasn’t brought a house so hasn’t actually transacted with an EA you don’t half know a lot boy. So can you help us out and tell me the following;
1. What are prices going to drop to?
2. When will this happen?
3. When will we get an increase in volume?
No other bugger knows
Jonnie
Is Brit1234 really rantave and FTB Dan? Has to be, always same message. They are very like the annoying screaming brat in Tescos and like them, why can't the irresponsible bad parents give em a slap so at least we all know why they are crying rather than trying to get attention.
Happy Xmas all.
Cripes! What a hornets nest!
Time for a rest methinks?
P.S. Peebee - nice to hear from you ;>)
I am watching you lot!
I have got the FTB'ers by the shorts.
£1 earned/spent is worth 60p after they pay their tax and vat (assuming they spend it).
If they buy the right/wrong things (beer/petrol) the original £1 earned is only worth about 30p to them (70p to me).
I am looking at ways of getting the rest.
Soon, I will get it to a point where all wages are paid direct to me and I give allowances back, like pocket money, of say £50 per week to all tax payers.
Ho Ho Ho, merry x/mas
PeeBee - Agree with your flat rate stamp duty charge - x% across the board.
The majority of the whole market relies on FTBs to keep things ticking along. I think SD should be void for FTBs. Their commitment is very high anyway, so as Tesco say, every little helps.
Beisdes, the money they save on not paying SD on their first purchase, most of it will go back into the economy anyway with moving costs, appliances and furniture etc.
Pee Bee: "I wonder what it (Stamp Duty) will be in twenty years...?
Same as now, going to take at least twenty years before we start paying back the (at least) £1.5 trillion we'll owe between us.
In the meantime the housing market will splutter along and no government will dare increase stamp duty for fear of killing an already paralysed market.
The government may well need to raise taxes. Stamp Duty on housing transactions will not be one of them. Whenever Stamp Duty has been raised (significantly) in the past, it has been in periods of credit booms.
Hawkeye
Thank you for yours I forgot to mention this daft idea of announcing that the SD holiday will be over next April.
You are spot on in your memory comments, better than mine as I cannot remember the name of the Chancellor (Lamont I think it was, if not then Lawson) or the year but I think late 1980's? Anyway the removal of the double tax relief for couples but delayed for several months did indeed cause chaos and panic and at NBS at the time I was in the thick of it.
Won't make the slightest difference though this time in my view, and those who anticipate a rush pre April followed by a drought I think are wrong. Why
Because in 1980 whenever it was there was plenty of money to borrow to fuel the panic demand.
Today there is not.
I agree with the advice to Dave though - boite the bullet and get on with it or you'll never buy.
The entire slump, slow down, call it what you like is far, ar worse this time and the market will take far longer to recover because there are two massive differences this time round. One is the lenders are cherry picking and limiting finance. The other is job uncertainty and the worst on that front is still several months off.
FTBers' Union proposes strike action in response... HPCers to staff picket lines outside EAs?
Some perspective - according to the last Land Registry, house prices fell more in one month than the reintroduction of the lower stamp duty level would cost nearly all FTBs.
Brit1234.
Wow Im getting some great tips on this thread. Price higher in Jan, Price lower in March. Christmas offically puts 5% on all property prices at the start of the year! (according to brit)
@Paula
"Stamp Duty on a £1m property is £50,000."
No it's not. Stamp duty on £1m is 4% (£40,000), stamp duty on £1,000,001 is 5% (50,000.05). Respectfully suggest that you get up to date before you start criticising others.
http://www.hmrc.gov.uk/sdlt/intro/rates-thresholds.htm
I had always factored in stamp duty into my £5k extra costs. There is no way I am rushing to buy before end of March. Sellers usually price higher at the beginning of the year, after March they will be far cheaper and should be far less even with the extra stamp duty costs.
If I'm honest we never saw a massive increase in sales when the stamp holiday started and I doubt we will see FTB'ers queuing at the office door to get exchanged before march. Very different when there was a blanket stamp holiday up to £175,000 in 2008, now that did make a difference. I hope the sentiments of Dave is not a common one. A £1600 pound tax postponing a purchase for a year? Sounds a bit much to me.
If the stamp is the only thing holding you back then adjust your offers to suit or add it to your loan.
Dave; Ask the vendor to pay the Stamp Duty for you.
Hell - the worst that can happen is they say no...
You lose NOTHING by asking - and you might just get what you ask for! ;o)
Happy hunting - let us know how you get on!
@Dave
Dave
Buy before March next year and you wont need to pay stamp duty - its a good time to buy at the moment. Good Luck!
Paula: "Stamp Duty on a £1m property is £50,000. Stamp duty on a £1.1m property is £55,000. Up to date on SDLT are you ??"
Actually, yes I am. 100% fully and completely, thank you.
Tell you what - read again what I said...
"Seller wants £1.1mil. Buyer wants sub £1.0m to avoid the extra 1% on the lot - which would save eleven grand...
IF the buyer WOULD pay the one-and-a-bit, then it makes perfect sense for the seller to offer to 'pay' the additional SD due for the buyer..."
Note the important bits please, Paula:
"the EXTRA 1% ON THE LOT..."
"the ADDITIONAL SD due..."
Last time I checked, 1% (being the DIFFERENCE between the sub-£1million 4% and £1million-plus 5% thresholds) of £1.1million equated to eleven thousand quid.
So - you STILL have a problem with my reckonings, Paula?
I am a potential First Time Buyer. I have been saving up in one of those First Time Buyer Savings accounts. I have got a fair deposit saved but really need to save for another eight months or so in order to be able to put down a decent deposit on the type of property I want. I was planning to start viewing early next year with a view to buying in the spring. I've already got my eye on one place.
I have been saving £400 per month plus bits of other savings when I get the chance. The type of property I want will be around the £150-£160K mark. This tax means that I will have to save for an extra 4 months just to pay it. This means that I will not now be able to think of buying until next winter. It's now likely to be 2013 before I can think of finally buying a property unless the market drops.
Thank you Mr Osborne. One very keen First Time Buyer off the market for a couple of years.
EA are more often than not greedy and want a quick easy buck. This is an industry where you need no qualifications and the impact of this industry is driven by greed from the bottom to the top.
I would withdraw all support and let houses find there own natural market price level. Only then will the country get moving again.
Tough life out there and its going to get tougher!
@Pee Bee
Stamp Duty on a £1m property is £50,000. Stamp duty on a £1.1m property is £55,000. Up to date on SDLT are you ??
125,000 will not buy you a studio in london - that is effectively a bedroom plus small kitchen with not enough storage space for your shopping and a tiny bathroom - obviously no bath (just a shower). Imagine a cramped confined space probably not even sunny side facing - all described by an estate agent as "Luxury Accomodation"
And on top of that the government wants me to pay a tax to buy the piece of s*$! as well !
What a Joke !
Well - looks like I'm treading new ground - I've never been at this point with both AceofSpades and Ray Evans before... and I respect their opinions more than most others on this site.
Trouble is, it ain't making me change MY opinion.
Ace - do you not see a 'value' in Stamp Duty-centric negotiations? What about a million-quid plus scenario? Seller wants £1.1mil. Buyer wants sub £1.0m to avoid the extra 1% on the lot - which would save eleven grand. In order to pay that eleven grand, the buyer has had to earn twenty two, so it's not to be sniffed at by any means. IF the buyer WOULD pay the one-and-a-bit, then it makes perfect sense for the seller to offer to 'pay' the additional SD due for the buyer, in order to achieve the higher price for the property, doesn't it - by a factor of about nine to one.
And so it goes on... Pass the cost up the chain. But at the bottom of the chain is a buyer, who - one way or another - has PAID (in some way, shape or form...) for the whole ball to start rolling...
Or am I SO wrong?
My view would be to make the vendor pay the stamp duty and would thus not create artificial markets at the stamp duty thresholds............... Just a thought!
I'm with Ray.
The escalating costs to buy a home are daunting to most. The opportunity to save that 1% is a a welcome respite.
The costs are even greater for the seller, so to suggest that a further haggle is made to over-run the stamp duty is not the answer for me either.
Forget Stamp duty at the lower end. 5% Stamp on £1m + houses is extremely punitive and is affecting house values at this level which in turn creates a downward domino effect through all price ranges.
Ray - BEFORE the HPCers and their likes jump up and down over the part of your comment that states "... a reasonable purchase price...", I always appreciate your views on 'all matters property' and actually quite like it when, on the odd occasion, we disagree.
I hear what you say. But - as stated below some way down, Stamp Duty is simply ONE element of a number which add up to the total cost of buying a home, is it not?
Let's use our mate Sibley's... as an example - for he WILL buy a property one day! ;o)
Sibs has a maximum budget of £140,000 (as I seem to remember).
Stamp Duty on a property of that 'value', at 1%, would be £1,400. So... in order to buy a '£140,000' property, it would involve a willing seller either agreeing to accept an offer from him of £138,614 (...on which the SD will be £1386); or accept an offer of £140000 and then 'pay' the £1400 SD for the buyer.
Both scenarios 'work'.
Both scenarios 'happen' in the market, do they not?
Both scenarios put money into the coffers - and do not rely on more expensive properties propping up the system or facing potential saleability issues (as per 'chas' doom predictions...) if on the fringes of thresholds.
I would also query, Ray, why you believe that regional variations on the actual duty would benefit an open market? Surely one size fits all would be the only fair and equitable method?
If you think about it slightly obtusely, someone buying a million pound mansionette is actually paying MORE than yer average FTB, in that they have already been taxed on a higher rate on their earnings therefore have to earn more (and by virtue pay more tax on it again...) in order to get the money together to then give it to the Government as Stamp TAX.
(back to scenario 3 in the above...)
I know you didn't want War & Peace on the subject - but I think a minor novelette from each of us is acceptable - don't you?
We just have to keep dodging the 'Crashers'... ;o)
@PeeBee on 2011-11-30 15:28:40.
I do not want to enter into a long debate. It is just my opinion that it would help the market if the genuine FTB could contiue not to have to pay any stamp duty below a reasonable purchase price. Price threshold could be regionalised.
Ray: "Sorry, cannot agree with you on this one."
On which point(s) - and why?
Can't have a discussion without a point or two to debate, can we? ;o)
Mr Burglar: "So Pee Bee has declared himself to be at least 100 years old"
Hmm... whilst I sometimes FEEL it (mainly when I have to respond to the HPC militants who have now decided to try to overtake this site...), I assure you I'm not QUITE half-way there yet!
The £30,000 threshold for Stamp Duty (£30,001 to be precise...) was introduced on 13 March, 1984. It was superseded in March 1994 with the new, lofty, £60k threshold!
I wonder what it will be in twenty years...? ;o)
My current views - for now! ;>)
@ Life continues on 2011-11-30 08:50:00
I do sometimes get fed up with FTB ers griping & whinging that they are entitled to buy at a price that suits them BUT, some do save a deposit – in your example it could be £16,000 and £1,600 is a considerable extra cost – for what? nothing! I may be going a bit soft but I believe genuine FTB ers should never have to pay stamp duty under the (say) average house price?.
@Rebel on 2011-11-30 09:30:17
So they can’t be bothered to vote?
Well, this country is a democracy (just) and that is the way it works.
Tony on 2011-11-30 08:53:45 and Anna on 2011-11-30 08:58:15 and Hawkeye on 2011-11-30 14:11:32
Very good points.
PeeBee on 2011-11-30 11:11:23
Sorry, cannot agree with you on this one.
IO, I can go with your numbers.
When the double tax relief was stopped the elected dictators at the time did a typo or so I am led to believe and it should have ended on the 1st May just after the budget that year and in the time up to 1st August the market went stupid. On the 2nd August it was like the lights were turned off. Phones didn't ring nobody came in and the result was years of prices falling. When that first Xmas came along and the FTB's were due out in January, the prices had been dropping due to brainless agents telling people to drop prices to make sales when there were no buyers around. The FTB's in January just wanted to see prices stabilise and they didn't. They ran away and rented what they could or stayed home for another 2 years before things got moving again.
Notice to all us EA's - DO NOT DROP PRICES WHEN NO FTB's AROUND STICK WITH IT.
Will this happen again is the question you should all ask because if the FTB's are going for the new ones and the 2nd hand stock is not selling what will we all say to vendors who own FTB size houses? Yep, you will be telling them drop the price to make a sale. I suggest that you analyse what your list of buyers amounts to and if you have no first timers dropping prices will not get them through the door.
Once again this bunch we elected have no idea about our business and they are meddling in things they do not understand. No change there then!
Anyone else have any ideas, mine are based on experience having seen idiot EA's destroy the golden goose. Bit of a problem I know for the corporate firms as they are driven in different ways that do not make good estate agency.
So Pee Bee has declared himself to be at least 100 years old
Burglar
@ Rebel
Yeah, pensioners are raking it in, they must be getting all of 0.3% pa interest on their savings.
Benefit claimants/layabouts are the biggest benefactors. 5.2% pa increase for doing diddly and reproducing to get the figures, slowly bankrupting the state. They are fast catching up with us mugs that work for a living on 2% pa pay increases (if we are lucky)
chas... chas... chas
"It's obvious. Stamp duty brackets distort the market."
I draw your attention to my previous post on the subject. Remove the brackets; remove the distortion.
"Houses don't sell to non FTB's for £255k, £260k, £265k."
Erm... yes they do. AND to FTBs as well. BLOODY WELL-OFF ones I accept - but they are out there.
"The same will happen to FTB properties around the lower stamp duty bracket."
Jeez - I remember when we worried if we could POSSIBLY take the price of a 4-bed detached over the dreaded THIRTY GRAND Stamp Duty threshold. The world looked like it was coming to an end.
Guess what. We did. And we sold 'em. (You might have noticed that they are just a smidgeon more than that, these days...)
rich; Anna; Spot on Anna, etc...
News for you all - the housing market is NOT EXCLUSIVE to Estate Agents.
There are private sellers and builders/developers out there as well you know. IF they are able to develop initiatives to get their own micro-market moving, you can either moan about it as you are doing - or you can work on your own initiatives.
Every second you spend typing your annoyance here is time you could have been coming up with a solution that would benefit YOUR micro-market...
Sorry - but it's right.
@ Wardy
I should wait until April 2012 if I were you.
@PeeBee
It's obvious. Stamp duty brackets distort the market. Houses don't sell to non FTB's for £255k, £260k, £265k.
The same will happen to FTB properties around the lower stamp duty bracket.
I said this 4 years ago to guarantee lending. Didnt mean to new home builders though. How will that help anyone except the board of directors (lets see how many MP's end up on these boards in a few years time.)
Iam starting a party up now. I will guarentee any mortgage upto the value of 1 zillion. pssst dont worry no one will want to buy because I am about to scare them about the economy in my autumn statement.
Anna you are so right. It is worrying that no one in the media even questioned this.
Not even Paxman could see that the housing market is real people in second hand houses, and not builders who will hoard any cash they make to keep shareholders off their backs.
I repeat my previous stance on this -
Introduce a level playing field. ONE rate of Duty ACROSS THE BOARD - NO EXCEPTIONS.
Anyone posting here or reading this who has ever sold a property on behalf of a seller knows that the buyer offers what they can afford. A sale is made as a total package - any buying costs, including Stamp Duty, are factored in to the offer and eventual agreed price.
So what is the problem?
IF a buyer cannot 'afford' a property with SD added - they couldn't afford it anyway.
'Chas': "FTB properties currently in the £125k to £150k bracket will all have to fall below £125k."
Dream on - or go take your head for a well-deserved cr@p, whichever is more fitting. Clearly you do not fit into the category I refer to above...
Enough of the VETERAN already, Madam Editor.
Having just joined your EstateAgentsReunitedDating site, the last thing I want in my search for someone to help me measure-up in the bedroom is the suggestion I might be over 50. That's my Autumn Statement.
Big T
Thanks chas,
Changing all my 1 bed flats to £124,995 as we speak.
hope this works!
It doesn't really matter. Just like you can't sell a house to a non FTB for £255k, you now won't be able to sell your FTB rabbit hutch to another FTB for just over £125k.
FTB properties currently in the £125k to £150k bracket will all have to fall below £125k.
Mark
First time buyers may but at the lower end - but in London - try finding a property below stamp duty threshold.
FTBs also work in London - rail fares are huge to they cant afford to commute and the cost of living is immense.
Mark. Thank you for putting average in capitals, no one would have ever understood it otherwise. Dim pratt. No point to make? Post added to the crap.
Thank you.
So, the pensioners get their 5.2% pension increase, retain their free bus passes, cold weather payments and all the other benefits, and the the young get dumped on again.
The reason? The elderly turn out to vote, the young can't be bothered. This government has been bribing the pensioners since it came to power. The balance is very wrong.
Erm, LIFE CONTINUES, please don't be so dim.
The UK average house price is, as the name suggests, the AVERAGE price. First time buyers do not, as a rule, buy that type of property as their first purchase. They buy at the bottom end of the market. Maybe, dare I suggest, under the stamp duty threashold.
If you are going make comments, please at least think a bit about them before you start typing. We have enough useless crap spouted on here. Please don't make it worse.
Thank you.
Marketing and PR spin.
It had no effect at all on my local market, and will have no affect when it goes.
Complete waste of time and money, as is this new bloody initiative. Will probably cost more to administrate than provide money to buyers.
The GMI scheme itself is not needed in terms of protecting lenders but that's another story.
The one here is the figures.
Can someone please explain to me in simple maths and english how even £1Bn helps 100,000 households (I assume in this age of spin that translates as 100,000 loans?).
I pointed out elsewhere the other day that at an average advance of even £100K (and surely the lowest AVERAGE loan must be that size?) in the initial figure discussed of £400M that translates to 4000 loans.
OK lets assume we find £1Bn from under the mattress eventually - forgive my simple sums but isn't that x 2.5 = 10,000 loans and households helped.
Is the 100,000 a typo or even more inflation?
Fogive my sums if wrong (Peebee help me here?!!) but to dividide £1Bn into 100,000 loans means an average of £10K each doesn't it?
In the normal areas of the country, such as where I work, I could count the amount of first time buyers that can afford over £125,000 on one hand so it won't make an ounce of difference.
Tony- sorry, I accept you are at the sharp end and needing sales as well. No insult to the likes of you intended.
However, thats why I said "developers", the big boys will make sales, take FTB's out of the second hand market so not kick starting chains. In essence, it makes one sale for a developer and helps no one else.
handwave: why the dig at developers? They are having to put money into this scheme as well, and from an estate agents perspective are sellers like anyone else, often with better margins. If you called them builders instead, people with homes and families, people just like you who need to make a profit in order to go on to their next project and employ tradespeople and keep local suppliers in business, maybe you'd cease taking such a cynical attitude.
I write as a small developer who's fed up with being constantly disparaged and criticised for every evil under the sun, whilst also being seen as a cash cow for funding S106 infrastructure, zero-carbon homes, and affordable homes, or any other pet scheme people can think of.
Does it really matter? Londons not come to a standstill has it?
UK Ave house price 160K ish? so deposit of 32K needed plus costs, so if just another £1,600 needed its hardly going to matter I am afraid. There’s always been some form of tax on housing, bricks, hearths, windows etc so it hardly a shock to the system.
We may have a little flurry to get sales through by the deadline, bit like a petrol duty hike, but then it will settle down again.
I agree with Peter Rollings. (Ouch)
What possesses a Chancellor and Government to announce assistance for first time buyers and then handicap them at the first opportunity? Fewer sales will result in less SDLT revenue. Its better to have 50% of something than 100% of nothing.
SDLT remains predominantly a tax on London and the stepped thresholds have a profound affect on values and offers.
Well the governemnet had to fund the handout to developers in the 95% mortgage scheme somehow.