In today's Autumn Statement, Chancellor George Osborne revealed that the stamp duty holiday for first-time buyers will end as planned on 24 March 2012.
In his statement, he said that "the government is publishing analysis showing that the stamp duty land tax relief for first-time buyers has been ineffective in increasing the number of first-time buyers entering the market".
This means that from 24 March 2012 buyers will pay stamp duty on any properties purchased that are worth more than £125,000. Prior to that date properties are free of stamp duty if they are worth less than £250,000.
Making things worse
Experts believe this will only make things worse for first-time buyers.
"While there is no clear evidence that the stamp duty concession has incentivised an increasing number of first-time buyers to buy, it is highly likely that there would have been fewer of them if it had not been in place," says Paul Smee, the director general of the Council of Mortgage Lenders (CML).
"The CML believes it would be a mistake to pull the plug on the concession – at least until the housing market returns to a firmer footing," he adds.
Meanwhile, a new mortgage indemnity scheme to help up to 100,000 buyers purchase properties with just a 5% deposit will be introduced.
The scheme will see buyers put down a 5% deposit with the government then underwriting part of the risk so that if and when the home comes to be sold if it sells for less than the outstanding mortgage lenders will be able to recoup their costs.
But perhaps the best news for potential buyers was reserved for social housing tenants. Osborne has announced that they will be offered up to a 50% discount if they want to buy their homes from the council.
Osborne also reaffirmed his intention to ‘get Britain building' with a £400 million scheme to kick-start stalled construction projects in England.