Home ownership was a key theme in this year’s Budget – but while the headlines were arresting, many of the initiatives will require more detail before they can be completely assessed.

No stamp duty for first-time buyers

First-time buyers purchasing properties worth up to £300,000 will no longer pay stamp duty.

The Chancellor’s move is good news for buyers taking their first steps onto the housing ladder - in 2016, 340,000 first time buyers had mortgages approved.

In London, first-time buyers purchasing more expensive properties, will now get the first £300,000 free of stamp duty.

The Chancellor mentioned “London and other expensive areas” – we will need to wait for detail on what those areas are or how the list of qualifying areas has been drawn up.

As the measure is being implemented immediately, a list must presumably already exist. And if a couple is buying, must both be first-time buyers or is it sufficient for one of them to be? As always with budgets, there’s a wait while the civil servants in the Treasury get the details out.

However, the BBC reports that 95% of first-time buyers will qualify and that 80% of them will pay no stamp duty at all.

The problem remains that mortgage borrowers still need large deposits to qualify for a mortgage on their first property. The Halifax stated recently that the average deposit paid by a first-time buyer is £33,000 and this is a major stumbling block for many young people in modestly paid jobs.

Welsh and Scottish arrangements to be confirmed

The reduction in stamp duty will come into effect straight away in England, Wales and Northern Ireland. However power over stamp duty is being devolved to the Welsh government in April next year, so the Welsh will need to decide whether or not to continue with the Chancellor’s policy once they take control of stamp duty taxation.

In Scotland, power over the collection and levels of stamp duty is already devolved to the Scottish government, so it will be up to them whether or not they follow the Chancellor’s lead.

Housebuilding measures

Developers who have bought land and are holding it while its value rises may be subject to compulsory purchase of the land if they do not have plans for developing it.

It is not clear how the government would decide that a given developer fell into this category however.

Certainly, the Chancellor has his sights set on developers who apply for, and are granted, planning permission then fail to carry out the permitted development. He has initiated a review into the reasons for these delays.

Some of the Chancellor’s other measures are easier to implement, such as the power given to councils to charge double council tax on empty properties. Most councils won’t need to be told twice that they can do this.

There was a grant of £400m to upgrade housing estates and the work to bring strategic sites into development attracted a £1.1bn grant.

Of course, the big news for future homeowners and those struggling to get onto the housing ladder, was the £44bn allocated to the building of 300,00 homes a year, by the middle of the 2020s.

This measure was welcomed by many but was also criticised, in light of the failure to meet current, less demanding house building targets.

OBR says stamp duty abolition will boost house prices

The Office for Budget Responsibility (OBR) immediately warned about the effect of the stamp duty tax relief for first time buyers.

Reminding the public that there has been a previous stamp duty holiday, it pointed out that subsequent evaluation of that holiday had concluded that most of the tax relief simply fed straight through into higher house prices. It didn’t therefore improve affordability for first-time buyers.

In a somewhat gloomy critique, the OBR points out that the number of first time buyers has recently increased from 40% to 45% of the total number of mortgages taken out. It sees the Chancellor’s stamp tax measure as increasing house prices by about 0.3% and it expects this rise to happen quite rapidly.

Some first-time buyers may be able to borrow a little more, as they will now effectively have more deposit money. But they may be borrowing to buy a property that is more expensive than it would have been without the stamp duty abolition.

As always with the housing market in England and Wales, it is difficult for any Chancellor to avoid the law of unintended consequences when making changes to reliefs and taxes.

Eddison Wells value trust and integrity, so their clients get a complete piece of mind that their mortgage and protection plans are in safe hands. With experienced mortgage advisers and access to a comprehensive panel of lenders, they’re able to provide assistance on any week day. Call now on 0800 808 9981 – or visit their website at http://www.eddisonwells.co.uk/