Major players in the property industry have urged the UK government to hold back from increasing stamp duty in the New Year for fear of ruining the fragile recovery in the housing market, an article from The Daily Telegraph has reported.
The way things stand at the moment the stamp duty holiday will end on New Year?s Day, 2010. The ?holiday? has meant that properties up to a value of ?175,000 were exempt from stamp duty, rather than the regular low threshold of ?125,000.
It is estimated that more than 100,000 homebuyers will be caught by the stamp duty trap, including many first-time buyers. A group of estate agents, mortgage lenders and house builders are writing to Chancellor Alistair Darling to urge him to postpone the move, telling him that it will bring the recovery in the property market to a grinding halt.
Chief executive of the National Association of Estate Agents (NAEA), Peter Bolton-King, said: ?Stamp duty is an anachronistic tax. It limits market flexibility, creates regional inequality and its slab structure unfairly distorts the housing market.?
The ?slab? structure is the way the rising percentage of stamp duty is applied to the whole property; e.g. a ?249,999 property has stamp duty of ?2,499 (1 per cent), whereas a ?250,001 property has stamp duty of ?7,500 (3 per cent).
The Home Builders Federation (HBF) and the Building Societies Association (BSA) are other groups imploring Mr Darling to extend the holiday for another 12 months.
Although house prices have been recovering in the past year, first-time buyers are still finding it hard to get mortgages. An adjustment of stamp duty back to a ?125,000 threshold would only make it harder for new buyers to get into the market.
