A residential property law expert says more help for first time buyers should be addressed in this week’s budget.
Michael Foxford, partner at Birchall Blackburn Law, explained that while the key announcements in the Chancellor’s budget on Wednesday will surround the much-anticipated Stamp Duty Land Tax (SDLT) changes, further support to help people get on the ladder is needed and could make a big difference.
He explained there’s also a chance that the SDLT changes – which mean people who have more than one house will pay three per cent more tax – could eventually lead the housing market to stagnate.
Michael said: “What we are seeing at the moment is a rush of people buying their second, third or fourth home and a rush to complete before the rate of tax is increased on April 1.
“Once people have bought those houses they are then unlikely to be in a rush to sell them and buy another paying the higher rate of tax.
“For every first time buyer there needs to be a house for them to buy, but there’s not enough houses being built, so it relies on those people in the middle to put their houses on the market and move on.”
Help to Buy ISAs are one way where young people and first time buyers can receive help. Announced in December the scheme is designed for first time buyers saving over a number of years. They receive a 25 per cent bonus on their final balance from the Government, but Michael would like to see it go further.
He said: “At the moment the minimum bonus of £400 is payable on closing balances of £1,600 and the maximum bonus of £3,000 is paid on closing balances of £12,000 – an increase on those limits would be extremely useful to people trying to get on to the property ladder.
“I’d also be interested to see any new initiatives to help – I’d like to see the Chancellor pull a rabbit out of his hat, something needs to be done.”