In today's autumn budget the chancellor Philip Hammond announced, to cheers from MPs and much media fanfare, that the government would be abolishing stamp duty for most first-time buyers in England and Wales, a policy that would come into effect immediately.
The change will apply to homes worth up to £300,000 and anyone buying a property worth up to £500,000 will also not have to pay the tax on the first £300,000, effectively saving first-timers about £5,000. Hammond said it would help 95% of first-time buyers, particularly those in areas like London where property prices are out of control.
If, like most young people, you've never had to deal with the nitty-gritty of buying a property, stamp duty is a tax levied whenever you buy a property over a certain value in England, Wales and Northern Ireland. The amount varies across the UK and depending on whether or not you're a first-time buyer and whether it's a residential or mixed-use property. Previously, the starting point for paying it in England was £125,000, meaning the average first-time buyer in the UK would have to hand over about £1,660 on a property worth £208,000, the BBC reported.
The government also made another big housing announcement, pledging £44bn worth of investment for housing over the next five years, promising to build 300,000 new homes a year and making it easier for councils to build in areas that need housing most. This would be quite a feat, taking the housing supply to the highest level since the 1970s.
While the stamp duty cut will help many first-time buyers, it certainly won't benefit them across the board. Unlike another big new policy announcement from the budget – the millennial railcard for 26-30-year-olds, which we learned about yesterday – many believe it could harm the younger generation more than it helps them.
Many pointed out that it mostly helps those already wealthy enough to think about buying a property and those with access to the Bank of Mum and Dad, rather than those on middle and low incomes trapped in the rental market and struggling to save for a deposit.
Even worse: many others pointed to a prediction from the Office for Budget Responsibility which said the change could cause house prices to rise by 0.3% next year, meaning that "the main gainers from the policy are people who already own property" – not so great for those not yet on the ladder.
Others suggested the policy was more about shoring up Tory support from younger people – among whom they've been haemorrhaging support recently – and gaining positive PR, rather than ensuring people across the UK can afford a roof over their heads. Nothing new there, then.
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