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The mortgage and housing industry is calling for the Government to continue to the cessation of stamp duty for properties under £175,000 for the good of all UK first-time buyers.

The industry says a return to the previous bands for stamp duty for any property above £125,000 on December 31 2009 could have a detrimental effect on the recovery of the housing market in regions that are already lagging behind.

The current stamp duty "holiday" for properties lower than £175,000 is due to expire at the start of 2010 but in a recent survey by the National Association of Estate Agents, 91% of estate agents surveyed felt that it should be extended. Also, 86% of those surveyed felt that the tax is unfair.

The Royal Institute of Chartered Surveyors says more surveyors in many parts of the country believe that they will see a drop in activity in 2010 following the end of the stamp duty holiday.

Simon Rubinsohn, chief economist for RICS says: "The additional transaction cost is still a worry to many, particularly first-time buyers, and is a threat to the market in the areas of the country that are still seeing a weak price environment. A return to the status quo will be of benefit to no one."

Peter Bolton-King, chief executive of the NAEA, says: "We believes that stamp duty is an anachronistic tax which, in its current form, is preventing a recovery in the housing sector – it limits market flexibility, creates regional inequality and its slab structure unfairly distorts the housing market. Now is the time for the Government to take action."

Robert Sinclair, director of the Association of Mortgage Intermediaries, says: "It is rare that the breadth of our industry comes together with such consensus on an issue. But the current stamp duty regime is distorting the market to such an extent that we feel compelled to speak out. We implore the Government to not only listen but, to act in support of our request for change to this damaging tax."

Whatever happens, there may be time to get hold of a property under £175,000 before the tax break ends. Talk to a mortgage adviser right away about getting hold of your first mortgage with a healthy discount to boot.

SOURCE: RICS, NAEA, AMI, 17/11/09

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