Santander mortgages: Budget’s stamp duty cut will stimulate housing market

25 March 2010 / by Rachael Stiles

Santander believes that scrapping stamp duty on properties of up to £250,000 announced in the Budget yesterday will bring much needed stimulus to the housing market.

Based on the success of the stamp duty holiday in 2009, Santander has said that it has high hopes for the Chancellor’s efforts to make it easier for first time buyers to get on the property ladder.

Phil Cliff, director of Santander mortgages, said that doubling the threshold for being exempt from stamp duty from £125,000 to £250,000 comes as “great news” for first time buyers.

“For some time we have been calling for this change and we know from our own data that the Stamp Duty holiday in 2009 was a great support in stimulating the housing market, and has significantly reduced costs of house purchase for houses up to £175,000 in value,” he said.

The announcement might encourage some of the 3.8 million potential first time buyers to buy their first home, he said, and added that Santander mortgages offer a range of products to help them become homeowners, such as its competitive four year fixed rate, with a loan to value of up to 90 per cent and fees as a low as £199.

But, while Alistair Darling’s latest Budget might bring some relief to first time buyers, it has done little to help other homebuyers, Mr Cliff continued.

“Sadly, today’s Budget hasn’t gone as far as to help all homebuyers,” he said, as others buying a property under £250,000, whether they are moving up the ladder or downsizing, could be up to £2,500 worse off, and those buying properties above the £1million mark will be hit by an increase in stamp duty from four to five per cent.

Mr Cliff added that Santander “would welcome an incremental progressive tax more in line with other taxes, which would be fairer and would also remove the distortion in the housing market of properties valued just above or below any tax threshold.”

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Written by Editorial Team