Scrapping stamp duty on £250,000 properties is a 'drop in the ocean'

Scrapping stamp duty on £250,000 properties is a 'drop in the ocean'

24 March 2010 / by Rachael Stiles

Commenting on the announcement in The Chancellor's Budget today that the stamp duty threshold is doubling from £125,000 to £250,000, Rachael Stiles, mortgage spokesperson for Fair Investment Company said:

"The Chancellor's announcement today that stamp duty will be scrapped on house purchases of up to £250,000 for first time buyers is a bold move and should provide a welcome boost for many people struggling to get a foot on the housing ladder.

"However, although a positive step, it is really just a drop in the ocean. While confidence in the housing market is slowly improving, if Darling is really serious about helping first time buyers he needs to address the bigger issue created by the credit crunch: the reluctance of most banks to offer competitive mortgage deals to anyone without at least a 25% deposit.

"Lenders are still cherry picking the best customers, and even appear to be actively discouraging borrowers with small deposits from getting a mortgage - according to Moneyfacts, borrowers with a 10% deposit pay nearly £5,000 more over two years than those with a 25% deposit. Until lenders start offering better deals to first time buyers, the housing market will continue to struggle - the stamp duty change alone is simply not enough."