Why we need a stamp duty cut for first-time buyers… not fewer takeaways
YESTERDAY it was suggested that young people would be able to buy a house if they forfeited a weekly takeaway along with five other luxuries.
Estate agents Strutt and Parker think that by giving up just six things, including buying lunch and playing the lottery, you could save up £96,000 in five years - the same as the average house deposit in London.
According to The Sun Online’s calculations that means you’d need to save over £1,000 a month on top of paying rent (where the average room in a shared house costs £725 a month).
You've probably also got a salary that is worth less than it was 12 months ago and are struggling against rising inflation, pushing up the cost of food, travel costs... everything.
Or perhaps they are assuming that you have a partner and you can both save £500 a month over the five years.
You'd also need your parents to give you £30,000. (Hi, dad!).
THE MATHS
THE easy way to save £65,000 over five years, apparantly.
Giving up one night out a week - £6,000 a year
Cutting out takeaways - £2,640 a year
Stop buying sandwiches - £2,576
Cutting out one city-break - £700
Cutting out lottery habit - £832
No annual mobile upgrade - £154
Total: £64,510 over five years
And then after those five years that £96,000 probably wouldn't be enough to afford a deposit in the area of London you were looking at in the first place.
Brilliant. But what are our options?
It has been heavily rumoured that the Chancellor Philip Hammond is set to cut the controversial tax for first-time buyers - but that really is just the tip of the iceberg.
Thousands of homes each year are not sold due to stamp duty costs.
The tax is "stifling" all aspects of the property market by fuelling the housing crisis.
Stamp duty is a challenge for first-time buyers
SOLICITOR Robert Adjetey, 32, recently took the plunge as a first-time buyer with a two-bedroom apartment for £465,000 at Barratt London’s Catford Green development.
Finding the property on a website that lists new developments offering apartments on the Help-to-Buy scheme as well as the incentive to have stamp duty paid for by the developer, played a very big role Robert's decision to opt for a new build.
“I’d had enough of moving around and renting,” said Robert, who has lived in ten different properties over the last six years.
“Stamp duty is a challenge to first time buyers, especially in London,” he added.
“It is a significant amount of money that has to be paid in cash or taken out of the bank before you can make that first purchase.”
“In my case, Barratt paid the stamp duty, which was a very significant factor for me deciding to go for that property.”
It makes it difficult for first-time buyers, young families as well as older, wealthier owners who want to downsize.
Controversially, lowering the rate for all homeowners could be the way forward.
Agents say the biggest slowdown in transactions has been in the £1million-plus market.
You may have little sympathy for millionaires, but this creates a blockage at the top of the market that affects the flow of transactions down the chain.
But what about supply? One of the biggest problems with the property market is that there is a lack of affordable housing.
Of course, we need to build LOTS more houses and they must be genuinely affordable to give young people a real chance or ownership.
Either way, I'm pretty sure I'd like the chance to buy a home rather than an occasional curry, but it's just not that easy.
Should sellers pay for stamp duty?
FOUNDER and CEO of online estate agent eMoov.co.uk, Russell Quirk, said:
“If there is further reform to reduce the obstacle of stamp duty for first-time buyers it will, of course, be a positive step, but a drop in the ocean where the affordability of getting on the ladder is concerned.
"Stamp duty is an archaic, anti-consumer land tax first coined to fund a war against France in the 17th century, resurrected by Chancellor Gordon Brown in the late 90s, and has remained an unnecessary, confusing and sometimes unexpected burden for buyers to bear ever since.
"A real sign of intent from the government would be to scrap it completely, but this won’t happen.
"So rather than tweaking the price thresholds and percentage paid, why not make it the obligation of the seller?
"The one who has benefitted from the increasing price of their property, the one that already has a firm foot on the property ladder and is best placed to stomach it?
"This would alleviate some of the cost for those trying to buy and help to address the issue of affordability.”
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