The Conservatives have pledged 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 today at Silverstone race track, Rishi Sunak acknowledged the difficulties many people faced in their attempts to become homeowners.
He said the Conservatives would extend the current stamp duty holiday for first-time buyers which means they do not pay the tax on properties up to the value of £425,000. This will become permanent if the Tories win the election on 4 July.
Meanwhile, it will also be reviving the Help to Buy scheme, which ended last year and allowed first-time buyers to take out an equity loan of up to 20% towards the cost of a new build home.
The ‘new and improved’ version will allow budding homebuyers to get onto the ladder with a 5% deposit on ‘interest terms they can afford’, according to the manifesto.
The Conservatives also said they would continue the Mortgage Guarantee Scheme, something the Labour party has also pledged to continue and develop via the Freedom to Buy scheme.
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, “is due to expire in March next year. The manifesto doesn’t make clear whether it will also extend the relief for those buying a property worth up to £625,000 – who currently benefit from no stamp duty on the first £425,000 of their purchase.”
Suter also thought the updated Help to Buy scheme seemed ‘decidedly sparse on details’ as to how it will be bigger and better.
She added: “Most aspiring homebuyers will likely find this set of policies lacking in imagination and excitement.
“While they will help to get some people on the property ladder, it’s not the drastic reform that many would have been looking for. Likewise, once again the Lifetime ISA is overlooked as a key way to boost first-time buyers’ deposit savings.”
Mortgage brokers, meanwhile, were not impressed with the Conservatives offerings for the housing market and potential homebuyers.
Michelle Lawson, director at Lawson Financial, speaking via the Newspage agency, said: “Who on earth recommended Silverstone as the venue? The Tories will be lucky to get out of the pits and make it onto the grid, let alone start and end the race.
“Unless they can pull a miracle out of the bag, this General Election race is over before it has begun.”
And Andrew Montlake, managing director at Coreco, said: “As far as housing is concerned there is nothing to see here at all, and no evidence that houses will be built in any great number after fourteen years of abject failure to do so and an abandonment of any targets.
“A rehashed Help to Buy scheme offers more of the same, demand-side sticking plasters over a gaping wound that further inflates prices. The Conservatives have failed to navigate the first bend, let alone the chicane.”
