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PBR 2009: Lenders concerned by stamp duty decision

9 December 2009

Lenders have expressed disappointment that the government has decided against extending its stamp duty holiday programme past the 31 December 2009 deadline.

Since September 2008, buyers of properties valued at between £125,000 and £175,000 have been exempt from paying stamp duty of one per cent. This resulted in an estimated 132,500 house purchase transactions in that time. However, Alistair Darling today confirmed that the scheme would not be extended.

Nici Audhlam-Gardiner, director of mortgages at Santander, said that this was disappointing news, not only for first-time buyers but also for the wider housing market.

She added: 'First-time buyers are the lifeline of the housing market, and it's a shame to see this support come to an end at a time when the wider housing market is still in recovery.

'First-time buyers currently in the process of buying should make sure they complete their sale before 31 December to save themselves up to £1,750 before the stamp duty holiday comes to an end.'

Audhlam-Gardiner believes that a wider shake-up of the current stamp duty system is long overdue.

She explained: 'We would welcome a permanent increase to the nil rate threshold or at the very least making stamp duty incremental, so it works like income tax.

'The current slab taxation system is unfair as it means that if a person falls into a higher threshold, even by just a few pounds, they pay the higher rate on the whole amount. This penalises all buyers, but particularly struggling first-time buyers and those in the South East, who are more likely to fall into the higher tax band.'

Joe McGrath

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