Hammond says cut will help 1m homebuyers
PHILIP HAMMOND has defended his headline Budget tax cut to assist first-time buyers, claiming it will help a million people get on the housing ladder.
The Chancellor dismissed criticism of the policy from the Office for Budget Responsibility (OBR), saying the watchdog had not taken other measures into account when it said that abolishing stamp duty on the first £300,000 would simply push up prices.
The stamp duty announcement was part of an ambitious giveaway package which pumped an additional £25bn into priorities such as housing, infrastructure and the NHS.
But the OBR took the shine off the move by predicting it would push up prices by around 0.3 percent – meaning many first-time buyers would have to pay more than they otherwise would while the main gainers would be people who already owned a property. It also suggested that only around 3,500 additional homes would be sold as a result of the incentive.
Responding to the claims, Mr Hammond argued that the policy 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,” he told the BBC.
“The OBR looked at a particular narrow question – if you reduce stamp duty and don’t do anything else what would happen?
“But we have not done ‘nothing else’, we have introduced a very big package, £15bn of extra money going in on top of the billions we are already spending on housing to increase the number of houses that we build in this country.
“The important thing is that over the next five years, over the life of this parliament, a million first-time buyers will make an average saving of just under £1,700 when they buy their first home. I think that’s a good news story.”
The Chancellor also responded to criticisms of his £2.8bn cash injection for the NHS.
On Wednesday, health bosses warned that the money only goes part of the way toward plugging the funding gap, calling for a “serious” debate about future access to services.
But speaking to Sky News, Mr Hammond said the efficiency plan set out by NHS England chief executive Simon Stevens had not yet been fully implemented and more savings could be made which could fund patient care.