Budget does nothing to help first-time buyers

Permalink: Budget does nothing to help first-time buyers
by Kay Murchie

During his first Budget announcement to the House of Commons yesterday, Chancellor Alistair Darling has been criticised for failing to help the majority of first-time buyers.

The only hope for struggling homebuyers are those in shared-equity schemes which is just a minority of first-time buyers.

Property experts and the National Association of Estate Agents (NAEA) have been urging the Government to revise the stamp duty threshold. However, these calls were ignored.

The current make-up of stamp duty has left first-time buyers paying more than £125,000 for a home with a bill for at least £1,250. In addition, the growing number of first-time buyers in London and the South East and families nationwide who buy homes costing £250,000-plus must pay at least £7,500.

It was announced that only shared equity owners will not need to pay stamp duty until they own 80% of their home. Furthermore, the schemes will only require that buyers borrow a minimum of 50% of the purchase price rather than the previous 75%.

Both of these changes will only benefit those who qualify for shared equity, such as key workers.

With the credit squeeze meaning lenders are reluctant to offer mortgages to prospective homeowners, yesterday’s speech offers no real respite for first time buyers, according to Helen Adams of FirstRungNow.com.

The Government continues to leave the next generation high and dry by offering almost no relief in terms of tax or stamp duty, added Ms Adams.

The changes in the shared equity Open Market HomeBuy scheme are welcomed but it is disappointing that these changes only help key workers, concluded FirstRungNow.