Business

Stamp duty tax debate 'welcome'

Estate agent window Image copyright PA

The abolition of stamp duty for many first-time buyers should spark a wider debate over the taxation of property, surveyors say.

New buyers purchasing a home of up to £300,000 no longer have to pay stamp duty owing to changes made in last month's Budget.

The Royal Institution of Chartered Surveyors (RICS) said that the move was unlikely to affect the market.

Prices and activity were relatively stagnant immediately after the change.

"However, if the move does trigger a wider debate about how best to tax property, it will serve a useful role," said Simon Rubinsohn, chief economist at RICS.

Alongside the abolition of stamp duty for sub-£300,000 homes bought by first-time buyers, properties costing up to £500,000 now have no stamp duty paid on the first £300,000 by new buyers.

Chancellor Philip Hammond said this meant 95% of first-time buyers would see stamp duty cut, while 80% would pay none at all.

The change has taken effect in England and Northern Ireland. It is in place in Wales up until the end of March at least, but not in Scotland.

Surveyors said that in November, when the announcement was made, there was a slowdown in the decline of inquiries from new buyers. Prices were flat, on average, across the UK.

RICS members expected a drop in prices over the next three months in London, the South East of England and East Anglia, but a rise in the North West of England, Wales, Northern Ireland and Scotland.

Prediction for 2018

Separately, the trade body for mortgage lenders has predicted no return of the scramble for properties seen before the financial crisis, for at least the next two years.

The number of property transactions is expected to remain at about 1.2 million for each of the next two years, according to UK Finance.

It expects a slight rise in lending next year compared with its previous forecast.

First-time buyer activity was more buoyant than it had expected this year, owing mainly to government schemes aimed at helping people buy their first home.

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