NewBuy mortgage scheme would benefit from a continued Stamp Duty holiday.

The Council of Mortgage Lenders advise that the NewBuy mortgage scheme would benefit greatly if the government were to rethink the Stamp Duty concession.

The CML is urging that the government rethinks Stamp Duty as it feels there could be a case for abolishing it for NewBuy purchases.

In a recent issue of News & Views the CML have said that by charging Stamp Duty for purchases made under the NewBuy mortgage scheme the government is sending out mixed messages.

The NewBuy scheme was created to assist cash strapped but creditworthy buyers by providing access to 5% deposit mortgage deals. However by charging stamp duty on those purchases above £125,000 would-be buyers are still struggling to raise the required cash to fund a purchase.

The CML is advocating a reform of Stamp Duty. It says that the government should move away from a slab structure where duty is charged at a high rate on the entire purchase price, to a marginal rate system.

The fact that such a reform would mean less Stamp Duty would be collected, is probably the reason the government is not keen to bring in a change.

The CML have also said that while the government is supporting first time buyers through the NewBuy mortgage scheme they should not forget first time buyers who wish to purchase an older property.

Government incentives should be on offer to all first time buyers, as the first time sector is an important part of a healthy property market.

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