Halifax welcomes stamp duty initiative

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Indy Politics

The UK's biggest mortgage lender today welcomed the Government's announcement that it was abolishing stamp duty on properties worth up to £175,000.

The move means anyone buying an averaged priced house is likely to avoid having to pay the tax, relieving some of the pressure on hard-pressed first-time buyers.

A Halifax spokeswoman said: "We welcome the Government's stamp duty initiative. This is a sensible measure and it will help the housing market."

The latest house price figures from Nationwide Building Society put the average cost of a home in the UK at £164,654, below the new stamp duty threshold.

But the Council of Mortgage Lenders said the move did not go far enough.

Spokeswoman Sue Anderson said: "While any initiative to try to help the housing market is welcome, this particular move doesn't go far enough in terms of the starting threshold and it is also getting close to the £250,000 threshold.

"The level of transactions this year is lower than last year and, while it means that around 40 per cent of transactions won't be caught (by stamp duty), it is questionable whether it will incentivise buyers who wouldn't have entered the market anyway."

Ray Boulger, senior technical manager at John Charcol, agreed that the move would not give the market a significant boost.

He said: "The only good thing about the announcement is that it has cleared the air."

He said the only people who were now likely to enter the market as a result of the change were those who had delayed making a purchase following the rumours that stamp duty would be suspended.

He said: "The gap between the thresholds is now ridiculously small, and I think people will be even more reluctant to pay over the £250,000 mark.

Stamp duty is currently charged at 1 per cent on properties sold for between £175,000 and £250,000, with the tax jumping to 3 per cent above this level, before rising to 4 per cent on homes worth more than £500,000.

The National Federation of Builders dismissed the Government's housing package, including the measures for England announced by Communities Secretary Hazel Blears, as as being "little more than a political sticking-plaster".

Spokesman Roger Humber said: "Today's proposals do not address the core problem, which is the collapse in mortgage availability.

"This is what has triggered the crisis for first-time buyers and led to low levels of housebuilding and rising unemployment in a housing market operating 70 per cent below last year's level."

He called on the Government to urgently address this problem.