Newspaper article The Journal (Newcastle, England)

Lenders Call for Stamp Duty to Be Overhauled

Newspaper article The Journal (Newcastle, England)

Lenders Call for Stamp Duty to Be Overhauled

Article excerpt

Byline: Aranda Rahbarkouhi

MORTGAGE lenders in the region are urging the Government to overhaul the stamp duty system which is acting as a drag on the housing market recovery.

Richard Sayer, of estate agents, Rook Matthews Sayer said that stamp duty needs to be "phased out" especially for the lower bands to help homebuyers in the North East in particular get to where they want to be.

He believes the impact of the tax on homebuyers' up-front costs clashes with Government initiatives such as Help to Buy, which are aimed at giving a helping hand to credit-worthy people who have limited amount of cash to fund a deposit.

He said: "I think stamp duty should be phased out for the lower bands all together as it is stopping people from getting to where they want to be.

"If people are living in the wrong location, or a house that is too big or too small, then they need to be able to move.

"The current system is having a knock-on effect, and any reduction in stamp duty would ultimately oil the wheels of the housing market. After six years of recession, we need to be encouraging people to move."

Chartered surveyor Rod Matthews added that any changes to the system need to be gradual to avoid periods of boom and bust.

He said: "The Government has just launched the 'Help to Buy' initiative which has helped to increase interest in purchasing homes.

"The market is sensitive and is beginning to show signs of growth, we need to see how the market continues to respond to 'Help to Buy' before we look at reducing or getting rid of Stamp Duty. Change needs to be gradual, to avoid periods of boom and bust."

The Council of Mortgage Lenders (CML) said in its regular "news and views" release, that the current tax year of 2013/14 marks the first period since the onset of the credit crunch in which the tax take has been supported by a pick-up in house sales as well as uplifts in house prices in some areas. The CML said: "This combination is expected to deliver a significant increase in revenue for the Treasury in the coming years - unless we finally see a reform to this much-criticised tax. …

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