Demand, not stamp duty, is to blame for the high price of houses

SIR – Diarmaid Kelly (Letters, February 17) thinks that the problem for first-time buyers is Stamp Duty Land Tax (SDLT). The stamp duty on a house up to £300,000 for a first-time buyer is nil. Over £300,000 and up to £500,000 it is 5 per cent of any amount from £300,001 upwards.

The number of first-time buyers outside London paying more than £300,000 must be vanishingly small. London has its own house-price problems, which would also not be affected by the abolition of SDLT, namely that the average first-time purchase in London exceeds £450,000. That is a result of too many people choosing to live in London and being prepared (and apparently able) to throw money into doing so.

Moreover, people wishing to buy a house to live in themselves will choose a house and then pay as much as they have to and can afford in order to buy it. Someone who is not a first-time buyer and who pays £200,000 for a house, pays £1,500 SDLT. If there were no tax to pay, then the buyer would go to £201,500 and sellers know this.

Abolishing SDLT would make absolutely no difference to affordability of property for buyers, only put more money in sellers’ pockets – which they could then pay to the next seller up the chain. And so on.

Nothing about the housing market would be solved by its abolition, but the Government would lose about £10 billion a year, which would have to be found somewhere else. Dr Richard Austen-baker

Lancaster

SIR – Several readers have complained that the housing shortage is being caused by buy-to-let investors. But as long as those properties are not empty, they cannot cause housing shortage.

If we could suddenly sell a million buy-to-let properties, there would be no reduction in the housing shortage, as there would be an extra million families looking for houses.

On the other hand, many property investors are discouraged from selling because of punitive Capital Gains Tax. This tax has become unfair since tapered relief and price indexing have been abolished. Sakhaullah Asmi

Whitton, Middlesex

SIR – Letters extolling the speed of house transfer elsewhere (February 17) miss the point. Nothing in English conveyancing law or practice prevents a speedy commitment. Conditional contracts, rescindable contracts, options, non-returnable deposits are all possible, with an element of risk and expense for buyer and seller .

What really slows everything down is, in a word, the “chain transaction” – that is, the tradition that has grown up that a house owner can make his sale dependent on his purchase and synchronised with it. The requirement is repeated again and again in a chain.

Having toiled with this problem for almost 40 years as a solicitor, I was amazed that these chains ever complete, but eventually many do. Anthony Gibbs

Wilmslow, Cheshire