The Conservatives have promised to make permanent stamp duty cuts for first-time buyers and introduce a ‘new and improved’ Help to Buy scheme.
At the launch of the party’s election manifesto at Silverstone circuit today, Rishi Sunak acknowledged the difficulties many people have faced in trying to become homeowners.
He said the Conservatives would extend the current stamp duty exemption for first-time buyers, which means they don’t pay tax on properties up to a value of £425,000. This will become permanent if the Tories win the July 4 election.
Meanwhile, it will also be the Help to Buy Schemewhich ended last year and gave starters the opportunity to take out an equity loan of up to 20% for the costs of a new-build home.
The “new and improved” version will allow first-time homebuyers to get on the ladder with a 5% deposit on “interest terms they can afford,” the manifesto said.
The Conservatives also said they would continue the mortgage guarantee scheme The Labor Party has also pledged to continue and develop through the Freedom to Buy programme.
Laura Suter, director of personal finance at AJ Bell, said the stamp duty announcement was simply a “rinse and repeat” of their previous policy.
“This previous policy,” she said, “will expire in March next year. The manifesto does not make clear whether it will also extend the exemption to those purchasing a property worth up to £625,000 – who currently do not benefit from stamp duty on the first £425,000 of their purchase.”
Suter also felt the updated Help to Buy program “seemed decidedly sparse on the details” of how it will be bigger and better.
She added: “Most would-be homebuyers are likely to find that this policy lacks imagination and enthusiasm.
“While they will help get some people onto the property ladder, it is not the drastic reform many were looking for. Similarly, the Lifetime ISA is once again being overlooked as an important way to boost first-time buyers’ savings.”
Mortgage brokers, meanwhile, were unimpressed by the Conservatives’ offer for the housing market and potential home buyers.
Michelle Lawson, director of Lawson Financial, said via the Newspage agency: “Who on earth recommended Silverstone as a venue? The Tories will be lucky if they get out of the pits and onto the grid, let alone start and finish the race.
‘Unless they can pull a miracle out of the bag, this General election The race is over before it even begins.”
And Andrew Montlake, chief executive of Coreco, said: “On the housing front, there is absolutely nothing to see here, and no evidence that a large number of houses will be built after fourteen years of dismal failure and an abandonment of any goals.
“A revamped Help to Buy program offers more of the same demand-side Band-Aids over a gaping wound that is further driving up prices. The Conservatives have failed to negotiate the first corner, let alone the chicane.”