First-time Buyers
BSA calls for tax relief on deposit savings
The Building Societies Association is calling for a tax moratorium on people saving for a deposit.
According to a poll carried out by the trade body, just under a quarter of first-time buyers think the government should remove taxes on deposit savings.
A fifth expected to be helped to government schemes such as Help to Buy. By contrast, nearly a third of homebuyers overall said the best thing the government could do was help lenders offer lower deposits and 22% believed it would help them.
BSA head of mortgage policy Paul Broadhead said:
“There are encouraging noises from builders on sign-up for the Help to Buy equity loan. If this and other schemes do encourage builders to build – increasing supply and improving consumer confidence, it will be a success.
“If the Government were to add some form of savings tax moratorium that would assist consumers by shortening the time they need to raise a deposit.”
The BSA research also revealed the proportion of people expecting house prices to rise reached 50% – a three-year high and a 17% increase on June 2012. Optimism was highest in London, followed by Northern Ireland and Leeds.
However, an increasing proportion identified raising a deposit, access to mortgage finance, lack of job security, Stamp Duty costs and affordability of monthly repayments as barriers to homeownership.
A quarter of buyers with a deposit of 20% or less said they would be helped by government schemes. Of those with a deposit of 25% or more, 13% said they would benefit from the schemes while one in ten buy-to-let investors who could already afford to purchase a property expected the schemes would help.