Debt solutions for first time buyers

Wednesday 24th March 2010

Alistair Darling's budget announcement on stamp duty concessions for first time buyers has been met with cautious optimism by the Council of Mortgage Lenders (CML).

First time buyers will be able to cut the amount of debt their first mortgage lands them in.

However, the CML warns that the practicalities of such a proposal could prove detrimental to the efficacy of its implementation.

The organisation estimates that in the next year approximately 136,000 people will take advantage of the concessions at a cost of £224 million to the government.

This could well be offset, however, by an increase to five per cent on stamp duty to be paid on houses sold for more than £1 million.

Michael Coogan, director general of the CML, said more detail on the government's plans was required.

"The budget offers a modest potential boost to the housing and mortgage market," he said.

"But as always the devil is in the detail and the detail is confused."

Liberal Democrat leader Nick Clegg was scathing in his criticism, accusing the government of a "political dodge".

"Britain needed a budget that gave us honesty in spending and fairness in tax, we have got neither," he said.

Equally unimpressed was David Cameron, who claimed that the government had not done enough to help those struggling financially.

Indeed, duty rises on a range of goods could certainly leave those on an already tight budget searching out debt advice.

Cider drinkers were hit particularly hard, with a rise of ten per cent above inflation announced, but smokers, motorists and other drinkers will all be feeling the pinch.

Three pence per litre is to be added on to fuel duty over the course of the next year, while tax on tobacco will raise by an initial one per cent above inflation and a further two per cent every year thereafter until 2014.

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