Chancellor Alistair Darling today announced a “package of support” for housebuilding industry including raising the exemption on stamp duty for homes up to £250,000.
In his last Budget before the election Mr Darling said stamp duty exemption will now be raised from £125,000 to £250,000 for the next two years to help first time buyers. Mr Darling said the rise in the exemption level would help nine out of 10 first time buyers.
But to pay for it, stamp duty on homes above £1 million will be raised to 5 per cent.
Barratt chief executive Mark Clare said: “87 per cent of our customers pay £250,000 or less for their homes. We are pleased that many of them will now have the opportunity to save thousands of pounds thanks to this measure which will help strengthen the housing market.”
The Home Builder’s Federation said the measures were a huge boost to the housing market.
HBF executive chairman Stewart Baseley said today: “This Budget is a huge boost to both home buyers and the house building industry.
“I am pleased the Government has recognised the importance of ensuring that people are able to buy homes.”
The HBF said the changes to stamp duty were part of a number of measures to boost the housebuilding industry.
Local Authorities will be required to maintain a five-year supply of deliverable, viable housing land.
The HBF said the public sector controls between a quarter and a third of potential housing land so it is essential that more of this surplus land is released for housing development.
Mr Darling said the Government has now committed £7.5 billion over two years to deliver up to 112,000 affordable homes, and around 15,000 private sector new homes.
Following the Budget 2010, the Government will now consult on detailed plans to replace the council housing finance system with a self-financing system.
The Government will also reduce the regulatory costs on the housebuilding industry as part of the indicative £1 billion to £1.25 billion savings to be achieved through the built environment theme of the 2010-2015 Simplification Target.
The progress will be set out in the Budget 2011.
CB Richard Ellis head of residential Nick Jopling said the five per cent rise for purchases over £1 million will have a significant impact on almost all commercial investment and widens the inequality that exists between bulk investors of residential property and individuals purchasers.
He said: “The Government is seeking to attract institutional investment into residential property to kick start development, particularly in areas of most need. This increase in tax will have a negative effect on these ambitions.”