CML wants stamp duty plan extended

HousesLenders have called for the Government to continue allowing first-time buyers to remain exempt from paying stamp duty, or risk plunging the fragile housing market into further disarray.
First-time buyers are currently exempt from paying stamp duty on sales of up to £250,000. But the two-year suspension of duty for such purchases is due to run out in March next year.

The Council of Mortgage Lenders (CML) said it had found that sales of homes which could have been exempted slumped after a similar concession ended in December 2009.

It believes that if the Government "pulls the plug" on the current concession, transactions could be distorted in a similar way, impacting on market confidence which is already "fragile".

CML director general Paul Smee said: "While there is no clear evidence that the stamp duty concession has incentivised an increasing number of first-time buyers to buy, it is highly likely that there would have been fewer of them if it had not been in place.

"The CML believes it would be a mistake to pull the plug on the concession - at least until the housing market returns to a firmer footing.

"First-time buyers need to get the message that the Government supports them as they take their first steps into a housing market where confidence needs to be restored.

"The housing market can act as a force for growth in the economy, but if this is to happen then buyers, lenders and builders alike all need a clear message that the Government sees them less as part of the economic problem, than as part of the economic solution."

The body, whose members are banks, building societies and other lenders, said the concession was likely to be costing the Government only a modest sum, given the relatively low number of house sales at present.

HM Revenue and Customs is due to publish an impact assessment of the current concession this autumn.

© 2011 Press Association
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