There was quite a bit in yesterday’s Budget which will have been broadly welcomed across the UK.
Like a slightly premature Santa Clause, the Chancellor dealt out largesse to motorists by cancelling the planned rise in fuel duty in April; he raised a glass to those looking forward to a tipple or two at Christmas by freezing duty on beers, ciders, wines and spirits; for those thinking of a trip abroad next summer, he announced there would be no extra charge for short haul air passenger duty rates and no increase on tax on long-haul economy rates either.
But, for those hoping to buy their first home, he saved the best until last. As from today, first-time buyers will not have to pay Stamp Duty on a house priced below £300,000; for those house hunting in more expensive areas such as London, the first £300k of a home worth up to £500,000 will also be exempt.
In real terms, that means in excess of 40% of properties on the market will now be free of Stamp Duty, reducing the cost of purchasing a new home for the first time by around £2,500. Great news…
However, there is a “but”.
With such a sharp rise in house prices over the last decade, the real obstacle most first-time buyers face is raising enough for a deposit. It’s not easy to find an average of £33,000 – and, although any reduction in the cost of buying a home has to be welcomed, some analysts are already asking if it’s enough.
There’s also the fact that the abolition of Stamp Duty only applies to first-time buyers so, if you’re already on the housing ladder, there’s not quite so much of an incentive to move. You can’t apply for Help To Buy either so perhaps it’s not surprising that some feel a little aggrieved that Mr Hammond’s generosity only seems to be targeted at first-time buyers. There was little or nothing for so-called second-steppers or downsizers.
But at least there were other measures too which could help ease the crisis, not least Mr Hammond’s attempt to get Britain building again. For example, for the first time, the Government seems to have realised that it needs to do more to plug the skills gap and train and recruit more brickies.
It was also encouraging to see Mr Hammond announce an investigation into why the number of approved planning applications for housing are not correlating with the number of new homes built. If developers are “land banking”, then maybe we’ll see sudden surge in construction – and, hopefully, the new properties will be the ones we need and not the three- and four-bedroom “executive” homes which make the most money.
So, if we had to summarise on yesterday’s announcements we’d probably agree it’s a step – and a significant one – in the right direction. However, Rome wasn’t built in a day – and it’s very unlikely Britain will be either.