First-time buyers feel relief but at what cost to others?
- 7th April 2010
- Buying Property News
The Chancellor's new stamp duty changes could cause more harm than good to our recovering economy.
As first time buyers look towards the future with renewed optimism, others view the Chancellors stamp duty changes as a backwards step.
Stephen Ludlow, Director of ludlowthompson.com says, "Stamp duty is a tax on mobility and by failing to extend the abolition of stamp duty to properties under £250,000 for the whole market the Chancellor has made a big mistake.
"Stamp duty makes selling up to buy in another part of the country to pursue a job too expensive for many. This undermines the workforce mobility needed to keep an economy at its most dynamic and productive and risks hampering the economic recovery.”
"In imposing these restrictions on stamp duty experts believe the Chancellor risks prompting inflation and generating a 'mini house price bubble."
Stephen Ludlow continues, "Stamp duty keeps property prices high as those who feel that their property is overvalued are unwilling to sell with the intention of buying back at a lower level. Now first time buyers will rush to buy, which will push up prices."
This is likely to cause many non first time buyers to withdraw from the market. It could mean that many would be buyers stay put as they struggle to keep up with increasing property prices.
Stephen Ludlow adds, "Investors will be unwilling to sell while the market is high and buy back again when it is lower because they will still have to pay stamp duty. This could cause another property market boom and bust."
This undermines the workforce mobility needed to keep an economy at its most dynamic and productive.
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