The first-time buyer (FTB) stamp duty concession should be reprieved to encourage more people to take out mortgages, one body has stated.
According to the Council of Mortgage Lenders (CML), the policy – which is due to end in March 2012 – needs to be kept in place.
This is because after the measure was first implemented and then withdrawn in December 2009, a slump in sales followed, which almost nullified the spike in transactions that occurred during the period of grace.
CML is worried that the withdrawal of the incentive could “distort the pattern of monthly transactions” as less people may choose to seek mortgages.
Paul Smee, director-general of the body – which recently revealed that gross mortgage lending totalled an estimated £12.9 billion in September – stated: “It would be a mistake to pull the plug on the concession.”
He continued by saying the housing market still needs to “return to a firmer footing” before changes are made to its current structure.
Mr Smee went on to note that FTBs need to know that the government is supporting them and this is one way of doing so.
