Homeowners unmoved by stamp duty » Housing » 24dash.com

The increase to the stamp duty threshold looks set to have little impact on the property market with eight out of 10 people saying it would not encourage them to move, a survey showed today.

The Government announced earlier this week that it was abolishing stamp duty on properties costing up to £175,000 for one year as part of a package of measures to help struggling homeowners and first-time buyers.

But 80% of people said the increase would not encourage them to move house, while 73% said they did not think it would boost the property market, according to website Moveme.com.

The Government's initiative received a lukewarm response from the property industry, with most people saying it would do little to boost activity in the housing market or halt the current price slide.

Instead commentators said taking steps to improve the liquidity of the mortgage market was key to increasing transactions.

Figures released yesterday by Halifax also showed that the move would have a disproportionate impact around the country.

Only around 12% of property sales in London were for below £175,000 in the past year, compared with 75% in the North and 72% in both the North West and Yorkshire and the Humber.

Keith McNeilly, co-founder of Moveme.com, said: "The Government's rescue package, released this week, has failed to meet the expectations of much of the industry and aspiring home buyers.

"While a revision to a lower stamp duty band is welcome, the Government has not gone far enough to make any significant impact on our ailing property market.

"A complete overhaul of the archaic stamp duty system is needed, along with action to improve liquidity in the mortgage market if we are to successfully revive an industry so crucial to the economy."

Stamp duty is currently charged at 1% on homes costing up to £175,000, after the Government increased the starting threshold from £125,000.

The other stamp duty thresholds remain unchanged, with the tax still charged at 3% on homes sold for more than £250,000 and at 4% on properties sold for more than £500,000.

Mr McNeilly called on the Government to scrap stamp duty on all homes sold for less than £250,000 and to take immediate action to increase mortgage lending.

But the Government is unlikely to take any steps on this front until after the Pre-Budget Report, when it will issue its response to the soon to be published final report into the market being carried out by former head of Halifax Bank of Scotland Sir James Crosby.