NAEA 'disappointed' by government's failure to extend stamp duty holiday

22nd February 2012

The National Association of Estate Agents (NAEA) has expressed its disappointment at the government's refusal to extend the current March 24th deadline for the stamp duty holiday.

Figures released by the NAEA on February 22nd show an eight month high in the proportion of house purchases made by first-time buyers, indicating prospective new homeowners are continuing to rush into the market before homes worth over £125,000 are hit by the reintroduction of ordinary stamp duty levels.

The NAEA's president, Wendy Evans-Scott, said: "We are deeply disappointed that ministers have axed this support for a crucial part of the housing market".

Currently, stamp duty is only paid on property bought by a first-time buyer for more than £250,000; perhaps not high enough to encourage house hunters in the country's most expensive locations, but a range that can benefit those looking in areas such as Manchester, where a number of flats for sale in Salford Quays are priced below the existing benchmark.

Given the government's decision to cut the current support for the buying market, Manchester letting agents could well see more potential tenants walk through their doors come the end of March, as renting will become an ever more attractive option.

The NAEA has clearly expressed its concern that by failing to maintain current stamp duty rates, ministers risk making it increasingly difficult for first-time buyers to get onto the property ladder in the future.

However, the organisation did welcome the chancellor's decision to introduce set rates on loan-to-value mortgage ratios, seeing it as a good means to safeguard against any unsustainable booms in the housing market.

The levels of first-time buyers purchasing homes may well be set to decrease once the March deadline passes, and it will be interesting to see how the country responds to the removal of what has evidently been a successful incentive.