Budget gets thumbs down
1:45pm Friday 30th March 2012
The Spring Budget has disappointed local estate agents with many saying it does nothing to help those trying to buy and sell at the moment.
At the top end, the new seven per cent stamp duty on properties over £2million, introduced at midnight on the day of the Chancellor’s speech, adds at least another £40,000 to the cost of each property. This means anyone selling a £2million home will pay a total of £140,000 in tax.
At the lower end of the scale, there was no new incentive for first-time buyers trying to get onto the property ladder, or second-time buyers trying to move up.
The stamp duty holiday for first-time buyers on property up to the value of £250,000, which ended on Saturday, was not extended.
“To get the market moving again, homeowners across the whole market need the confidence to sell their homes, and first-time buyers need encouragement to climb onto the property ladder – this budget provided neither,” said Wendy Evans-Scott, president of the National Association of Estate Agents based at Hamptons in Epsom.
Dominic Butler, partner at Cubitt and West, said while Sutton and the surrounding area had a limited supply of properties over £2million, the new seven per cent tax rate would be a “huge problem” for those just over the threshold.
“They will struggle to find prospective purchasers that will want to pay the additional uplift in stamp duty,” said Mr Butler.
“What was more of a disappointment is the lack of extension to the stamp duty holiday for first-time buyers up to £250,000, as it has unquestionably contributed to the recovery in the local market due to the average sale price for us being £240,000 in 2011.
“We would like to see a more staggered approach to the stamp duty threshold at £250,000 as it is always difficult for prospective purchasers to come up with an additional two per cent rise over this figure.”
Paul Aboud, managing director of Cairds, said while there were fewer first-time buyer homes in Ashtead, he did think the new seven per cent stamp duty rate could be problematic for homes priced just over the £2million threshold.
“An additional £40,000 added to the stamp duty over £2million will affect houses within £300,000 to £400,000 of £2million,” said Mr Aboud.
And he added: “Moving is expensive, and it would have been nice if the budget could have reduced these costs across the board.”
Wendy Evans-Scott repeated the NAEA call for stamp duty reform.
“The NAEA has consis-tently called for Stamp Duty Land Tax to be modernised, and in its pre-Budget submission it called on the Chancellor to move away from the current ‘slab’ structure to create a fairer, more logical system.”