Last year the government in the UK suspended stamp duty on properties between £125,000 and £175, 000 in value in the hope of helping to revive the struggling property market by increasing affordability for first time buyers.
Properties under the value of £125,000 have always been exempt from stamp duty, and by increasing this threshold to £175,000 on a temporary basis the government hoped to help more people onto the property ladder whilst at the same time boosting property sales in a struggling market.
However, recent figures have shown that whilst many consumers were optimistic about the move and welcomed the suspension of stamp duty the measure has not helped as many people as was hoped.
The government had predicted that based on the number of people that would save on stamp duty buyers would collectively save £600 million on house purchases in the first twelve months. However, according to figures released by the property website zoopla.co.uk only £173 million was saved during this period.
It is thought that there are a number of reasons why the figures have been so disappointing compared to the figures that had been predicted.
One of the main factors is that many would be first time buyers have found it extremely difficult to get a mortgage at all in the current climate regardless of stamp duty requirements, partly due to increased stringency from lenders and partly due to the high deposit levels that lenders have been demanding.
Nicholas Leeming from Zoopla said: “The stamp-duty holiday has so far failed to reinvigorate the housing market. Rather than ending it, the Government should consider extending it by making first-time buyers permanently exempt and by giving others the ability to defer payment for up to, say, five years.”