Chancellor Kwasi Kwarteng’s mini-Budget in September brought a flurry of new stamp duty thresholds for first-time buyers (FTBs) on a permanent basis. In addition, stamp duty was eradicated for purchases of land and buildings for commercial or new residential development.

Now that the measures have further bedded into the market, there are varying thoughts among mortgage professionals on whether they will help or hinder buyers.

Shaw Financial Services owner Lewis Shaw thinks it “simply doesn’t make sense in the current climate”.

He says: “Tax cuts fuel demand and push up prices, leading to inflation. The Bank of England is tasked with controlling inflation, which is at a 40-year high, and its only tool for this is to raise rates, which in turn dampens demand. By doing both, we might as well do neither.”

Shaw suggests the only people who benefit from this are the buyers already in the pipeline with lower-rate mortgages booked months ago.

Although cutting the stamp duty cost will benefit buyers, L&C Mortgages associate director of communications David Hollingworth says the cuts “may be acting as more of an aid for the market to maintain buyer interest, rather than as the major stimulus that resulted at least in part from the stamp duty holiday during the pandemic”.

He adds: “It’s certainly positive that the changes were announced as permanent, which will help to give some clarity and avoid the inevitable spikes and service worries that deadlines have caused.”

Private Finance technical director Chris Sykes says raising the zero-rate band further towards the average UK property price “now makes sense, in my opinion, especially with how much prices have risen”.

Given that the cuts are permanent, Sykes says this “doesn’t induce the bringing-forward of plans and, to an extent, panic that the previous stamp duty holiday did, so it shouldn’t shoot prices up”.

Fairfield Money director Ben Ramsay observes that, so far, there has been “no indication” that house prices are changing because of the measures. Instead, “the market has been buoyant and good properties continue to sell quickly”.

But Just Mortgages national operations director John Phillips thinks it is “too soon to say whether this particular move has affected house prices”.

Although FTBs initially welcomed the cuts, FM Financial Services director Serena Franklin says, in the current market, “the increased rates may be a new factor that delays them from making a purchase”.

Generation Home commercial director Peter Dockar notes that average mortgage payments for typical homebuyers are double what they were at the start of the year for the same property, which he says will “dwarf any stamp duty benefits”.

He adds: “In this environment, demand withers. People delay decisions and we are already seeing cases fall through as buyers and sellers defer their purchases.”

Meanwhile, Staton Mortgages director Mike Staton suggests that FTBs have been “completely left in the dark”.

He says: “We have seen no real replacement for the Help to Buy Equity Loan scheme and, with the increase in the cost of living affecting their affordability, I don’t expect to see them being helped any time soon.

“Stamp duty [cuts are] beneficial only if you can afford to buy the home in the first place. FTBs are a big part of the market but it is going to be down to the Bank of Mum and Dad to get their kids on the ladder.”

Although the current volatile market may cancel out the stamp duty cuts, Phillips says: “What is evident is that we have seen a surge for FTBs to seek broker advice and not listen to the media hype.”

Looking at what the next few months will bring, Access Financial Services chief executive Karl Wilkinson thinks the prevailing economic events will make it much harder for people to get on the housing ladder.

“The raising of the stamp duty threshold will be a small help, but pulling against this are the three factors of rising house prices, rising mortgage interest rates and the end of the Help to Buy scheme.”

Meanwhile, Connect Mortgages chief executive Liz Syms suggests, if interest rates settle, the market will “start to find [its] feet in a new rate environment and then incentives like stamp duty cuts may play a part”.

She adds: “For buy-to-let investors, who help provide homes for those who cannot afford a mortgage, they are also hit by the rate increases, without the ability to offset the interest costs against tax.

“This will put some in a position of paying tax from the income they don’t have. They also must pay the additional 3% stamp duty, so do not have the full benefit of the stamp duty cuts.

“Unless more is done to address affordability for all parts of the market, I cannot see much change in the coming months.”

While it will disappoint buyers that the savings from the cuts will have been largely wiped out for most by the recent surge in interest rates, UK Moneyman managing director Malcolm Davidson says: “It is an indicator that the Truss government still sees property as a ‘wide multiplier’ for the economy and that homeownership is still something to be aspired towards.

“We are still seeing demand massively outweigh supply and, with potential sellers more likely to stay put due to the increased cost of living, it is unlikely that we will see a price crash in the short term,” he adds.