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Stamp duty axe is incentive to save house deposit

Philip Hammond: stamp duty axe is incentive to save house deposit

Philip Hammond has defended his flagship housing policy against criticism it will raise house prices and said that abolishing stamp duty for first-time buyers would create an incentive to save a deposit.

The chancellor said the policy, which abolished the stamp duty on homes under £300,000 for first-time buyers, would help a million people get on the housing ladder.

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But after Hammond delivered the budget on Wednesday, the Office for Budget Responsibility (OBR) said it would push up prices by around 0.3{3e863b725ce664a5bfce944cbfbc8a4ea490dc269f179428ad88b529bb8a3de5}, meaning many first-time buyers would have to pay more and people who already owned a property would gain more. It also suggested only around 3,500 additional homes would be sold as a result of the incentive.

Hammond rejected the criticism that saving enough for a deposit was the key barrier to home ownership, rather than stamp duty. First-time buyers need an average deposit of £33,000, which in London typically rises to £106,577, according to Halifax.

“Hopefully, by abolishing stamp duty, which will save the average first-time buyer about £1,700, that will be a help and an incentive to focus on getting the deposit together, getting the money together to get on the housing ladder, and we hope that many more young people will be able to get on the housing ladder,” Hammond told BBC Breakfast.

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