Scrapping Scottish stamp duty for first time buyers on homes up to £175,000 will not address wider problems in the market, experts have said.
Finance Secretary Derek Mackay’s decision to introducing the new Land and Building Transaction Tax (LBTT) relief was branded “disappointing” by some in the industry who had hoped for fuller reform of the devolved system.
It follows the move by Chancellor Philip Hammond to abolish stamp duty on homes under £300,000 for first-time buyers in the rest of the UK, which has been criticised for potentially pushing up house prices.
Hew Edgar, Scotland policy manager for the Royal Institution of Chartered Surveyors (RICS), said: ” Following in the footsteps of Philip Hammond and scrapping LBTT for first time buyers to the value of £175,000 is not the answer to stimulate activity in the Scottish housing market, making today’s announcement disappointing.
“Whilst this change has potential to stimulate activity in the short term, it comes at a time when the market is subdued, and does not tackle the overarching problem of housing shortage supply across all tenures.
“Once again, we call on Scottish Government to review the current LBTT as a priority going forward as this current framework is not only limiting market activity, but could ultimately bring the market to a standstill.”
Alan Cumming, national estate agency director for Aberdein Considine, said: “The cabinet secretary has gone some way to closing the gap between first time buyers in England and Scotland, but some will feel he hasn’t taken the necessary steps to address the difficulties of those struggling to buy their first home in more expensive parts of the country.
“Due to the bottleneck being created at the top end of the market, the current structure is expected to raise tens of millions less than forecast over the life of the current parliament. This was a missed chance for Mr Mackay to address that.”
Susannah Simpson, partner and head of private business at PwC, said the announcement would provide a saving from LBTT of up to £600.
But she added: “However, it remains unclear from the announcement whether first time buyers purchasing properties costing in excess of £175k will benefit from the relief.”
But Nicola Barclay, chief executive of industry body Homes for Scotland, said the move could be ” a valuable boost for those aspiring to get on the property ladder, representing additional money towards their deposit or moving costs”.
Meanwhile a commitment to invest £756 million to help meet the Scottish Government target to build 50,000 affordable homes over the parliament was welcomed by the Chartered Institute for Housing in Scotland.
Executive director Annie Mauger said: “It was also encouraging to hear reconfirmation of the Scottish Government’s commitment to create a £50 million ‘Ending Homelessness Together’ fund and to target this funding in accordance with the recommendations of the homelessness and rough sleeping action group.”