Spring break

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  • xman
    Admin
    • Sep 2006
    • 24007

    Spring break

    Spring is traditionally a time when flowers blossom and the housing market blooms.

    The recent stamp duty break introduced by the government was supposed to get more budding first-time buyers into the market, but not everyone believes it is actually working.

    The British Property Federation (BPF) says it believes the problems faced by first-time buyers cannot be solved by freezing stamp duty.

    "'The affordability of properties isn't determined by how much they cost or how much you can shave off stamp duty, it's by how well you can get your hands on finance," says the BPF's spokesman Andrew Teacher.

    "So if you can't get hold of a mortgage, if you can't raise the deposit you need to get that mortgage, then the property is still unaffordable whether stamp duty is 1% or 5%."

    Bottom on the ladder

    One would-be first-time buyer is 28-year-old Claire Yates from south London.

    She is currently renting a home but would like to invest in her own property one day.

    "It doesn't really register because even if I don't have to pay stamp duty if I find something up to £250,000, I couldn't get a deposit in the first place," admits Claire, who works as a photographer for an estate agent.

    "It doesn't really help at all, I'm still stuck in this vicious circle of wasting money on rent that I could be using to pay a mortgage - it's simply because I don't have the funds to pay that deposit in the first place."

    Two year freeze

    Stamp duty is a tax which is calculated as a percentage of how much the property is bought for.

    Before the change last month, a first-time buyer, like all others, would have paid 1% in stamp duty on a property worth up to £250,000.

    But from now until 25 March 2012, they will not have to pay the tax on properties up to that value.

    The move is meant to encourage more new buyers to take that first step onto the housing ladder.

    Industry experts like Melanie Bien from Savills Private Finance think it is working.

    "I think already it's having a huge impact on the number of first-time buyers coming into the market, just looking at what is around at the moment," she says.

    "It's a really nice bonus for someone who already has a deposit and can afford the mortgage.

    "It saves up to £2,500, which they can spend on anything really - home improvements, the move or new furniture," she adds.

    Few options

    Back at home, Claire is considering what her next move might be.

    "I'd love more than anything to be able to have my own place," she says.

    "I want something, somewhere I can put my own personality into, but I can't see myself being able to do that any time soon. I certainly couldn't do it on my own.


    "It would have to be with someone else, a partner, with family or a sister who'd be willing to do it with me - there's no way I can do it on my own," she adds.This article is from the BBC News website. ? British Broadcasting Corporation, The BBC is not responsible for the content of external internet sites.


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