NAEA managing director Mark Hayward has given a warm welcome to Labour’s proposal to scrap Stamp Duty Land Tax for first-time buyers.
He said it would “only mean good things”.
But he seemed to be a lone voice, amid a sharp industry backlash with one critic describing the policy as “cobblers”.
The RICS also took a completely different stance.
Hayward said: “This could be a real vote swinger for those looking to step on the housing ladder.
“Scrapping Stamp Duty for homes under the price of £300,000 would only mean good things for hopeful first-time buyers.
“For many, hidden costs such as Stamp Duty can be the difference between being able to afford a home, and not being able to afford one.
“Our recent research showed that just under a third of house sales were made to first-time buyers, and hopefully we’ll see this significantly increase over the next three years.”
But Naomi Heaton, CEO of property firm London Central Portfolio, savaged Labour’s plan as “cobblers”. She was among the many critics who say that house prices will simply rise for first-time buyers, knocking out any savings. Heaton also queried Labour’s grasp of economics.
She said: “Labour are clearly very bad at their sums, which is why, of course, we are so worried about them running the economy.
“The average purchase price for a first-time buyer outside London is £137,120, according to the Halifax.
“Following the new Stamp Duty reforms introduced by the coalition last December, the Stamp Duty charge for buyers at this level is just £242. This is what the Labour policy would save, not £5,000.
““If we look at the country as a whole, including London, the average price for a first time buyer is £171,870. Again, due to the recent reforms, Labour would be knocking £937 off their purchase costs, not £5,000.
““The risk of such artificial incentives (apart from, some would say, Labour winning votes) is that it increases demand to buy property and hence puts upward pressure on prices, wiping out any savings.
“Greater accessibility to homes, either to buy or rent, can only be resolved by building more. Labour’s Shadow Secretary of State, Hilary Benn, yesterday refused to say how much they would build in the three years during the Stamp Duty holiday.”
Jeremy Blackburn, RICS head of policy, said: “While this proposed Stamp Duty reform could help some first-time buyers, it’s another measure that tinkers with demand-side stimulus. Prices are already predicted to rise in the next Parliament and this is only likely to make matters worse.”
Nick Leeming, chairman of Jackson-Stops & Staff, said Labour was stirring up an “unhelpful” inter-generational war by pitching young adults against their parents and grandparents.
He said Labour was promising to help young people while taxing the older generations, including those who had become buy-to-let investors in order to fund their retirement.
He said: “We need policies that do not distort markets as this has a short-term effect, rather than delivering a long-term benefit. We support help for first-time buyers but Labour promises to fund the abolition of Stamp Duty under £300,000 through a series of measures against landlords which are neither specific nor realistic.”
Comments (14)
Labour are the party of economic lunacy. Period.
It was right for the coalition to abolish stamp duty for first time buyers earlier in the parliament. We needed to put confidence in the economy at a time when we had high inflation and no growth.
We now have growth, inflation is under control and the stamp duty changes made in November has once and for all dealt with the issue of people not prepared to pay a property above a certain threshold.
This policy if implemented, will really take us backwards, Labour are simply attacking the wrong issue, and doing so purely to gain votes.
To Mark Heyward – please let others who know the market make the comments next time. You are embarrassing all member agents and bringing NAEA into disrepute.
NewsBoy – you omitted an important word in the above statement:
“further”.
Needs to go in the last line, twice – I’m sure you will realise where… ;o)
Please don’t mess with the market. Everything is going rather well at the moment with low inflation and a nice balanced market. What we really don’t need is a bunch of Muppets coming along and creating chaos. All politicians have a very poor record on interfering in the residential market going back to the 1988 change in Miras all the way through to HIPs and now they are at it again. The one really sensible piece of reform to stamp duty happened last year so please don’t upset it. Please go away and don’t come back.
Having removed the damaging SDLT thresholds, Labour have established a new one which discriminates against older people downsizing, people getting divorced (single families) and helps no-one in London. It seems no party is offering solutions to the housing problem and instead are offering lists of sweeteners – very short-sighted in my opinion.
It was only a few years ago that no property was ever valued within £10,000 of the stamp duty thresholds because buyers wouldn’t pay the extra stamp duty. We have only just seen those pressure points become less dramatic and then if Labour get in, we will be back to a position where no property will ever be worth £301-£315,000 because buyers won’t want to pay the stamp duty once again.
On a separate note Mark Haywood perhaps should refrain from commenting on political party pre election manifesto pledges as to everyone else it comes across as an endorsement.
@Naomi there is every chance someone from Shelter has been helping Ed with his maths. Shelter are consistently rubbish at maths and can make a micro survey of tenants multiply up to a headline grabbing percentage of the population just to make a point that doesn’t really support itself. Same here!
Do you think the cost of this announcement will be that first time buyers currently involved in a Orchard will refuse to exchange until after labour lose the election? This puts the brakes on that sector of the housing market just for a last desperate effort at vote winning. Shows how stupid they are. If it was such a good idea why haven’t they lobbied for it when they were in power or during their time in opposition? Idiots.
Given Labours thoughts about admin fees I think only fair that solicitors are banned from charging fees. Will help buyers as the moving cost is far too high.
Ouch!… that comment wouldn’t have been hit with more ‘Dislikes’ if it had been posted by The Quirkster himself, SP! ;o)
If people had not guessed was tongue in cheek 😉
I know, mon ami – but sometimes as you are painfully aware we meet those here who have had senseofhumourdectomies…
Have to agree with the majority of comments in the article. Unless our politicians deal with the supply – demand issue in housing, tinkering with stamp duty etc… will only have a short term & marginal effect. Good for votes I suppose !