Coalition agreement commits only to review of move to help first-time buyers
A Conservative party election commitment to raise the first-time buyer stamp duty threshold permanently to £250,000 has been watered down in the party's coalition agreement with the Liberal Democrats.
The full agreement, published this morning, says only that “we will review the effectiveness of the raising of the stamp duty threshold for first-time buyers.” This compares to Tory manifesto pledge that: “we will permanently raise the stamp duty threshold to £250,000 for first-time buyers, meaning nine out of ten of them will pay no tax on their first home purchase.”
Encouraging first-time buyers to re-enter the housing market is seen as key to recovery in the market as a whole, particularly given the huge deposits mortgage lenders are still expecting from purchasers.
The Liberal Democrats had no commitments regarding stamp duty in their manifesto, beyond saying they would clamp down on avoidance. The coalition is thought to be looking for extra ways to save money after adopting the Lib Dems' key pledge of raising the income tax threshold to £10,000.
The document confirmed that the proposed changes to localise the planning system, promised by both parties, will be implemented. It said regional spatial strategies, which set housing targets for local authorities, will be abolished “rapidly” and that wider reform will follow after. The document does not specifically mention the implementation of third party rights to appeal, which have been widely criticised by the development industry and appeared in both party manifestos.
The document also offers the coalition the ability to dodge the previous government's commitment to make all new housing zero carbon by 2016. Rather than repeat this pledge it says only that “we will require continuous improvements to the energy efficiency of new housing.”
It also pledges to introduce a national planning framework.
Sarah Webb, chief executive of the Chartered Institute of Housing, said: "It is clear that the programme has been and will continue to be shaped by spending constraints, with manifesto commitments around stamp duty cuts and empty homes funding changing to more open reviews. We now await the emergency budget on 22 June and will be working hard with the housing profession to secure political and financial commitments to housing in the lead up to the autumn spending review."