Yesterday, Chancellor Philip Hammond presented the Autumn 2017 Budget in which he announced that the Government have scrapped stamp duty for first-time buyers spending up to £300,000 on a property. In addition, first-time buyers who are purchasing a property worth between £300,000 to £500,000 will not have to pay stamp duty on the first £300,000 and will only have to pay stamp duty on the difference. The Government state on their website they predict a saving of £1660 on the average property for first time buyers.
The Government predict that 95% of first-time buyers will benefit from this change with 80% of those no longer needing to pay stamp duty.
Those who are currently in the process of purchasing a home but haven’t completed as of 22nd November 2017 will benefit from these changes as will any first-time buyers purchasing from now onwards.
What does this mean for the property market as a whole?
Since the financial crisis of 2008 and the subsequent limits on borrowing with large deposits required and increasing mortgage interest rates, it’s been incredibly difficult for young people and those who’ve always rented to be able to get onto the property ladder.
With the scrapping of stamp duty for first-time buyers up to £300,000, this will not only encourage first-time buyers looking to purchase property but those looking to sell too. Owners with property on the market who may be part of a chain will reap the benefits as those selling more affordable housing for first-time buyers may see an increase in property interest and sale completion, thus encouraging the movement of property transactions throughout the chain.
“I personally believe that this is a great change which will greatly affect our industry”, MHL Office Manager, Kelly Aspey-Frost MNAEA, commented following the announcement,
“First time buyers have had it hard in recent years. The loan to value is just one of many of their stumbling blocks with many having to save a huge 10% deposit. It takes too long for many to save a deposit and renting absorbs much of their monthly income.”
“The government so far have failed to recognise this and as such we have seen the age of first time buyers increase from early 20’s to late 30’s. It has been pointed out that the number of young people owning their own home has dropped from 58% to 38%. The facts speak for themselves! On average a first time buyer will be saving a huge £1700!”
“This can only inject a positive effect to our business and I look forward to helping more first time buyers take the first step on the property ladder.”
Whilst many first-time buyers will be rejoicing over the saving they’ll be making, existing property owners can also financially benefit from the change with marginally higher asking prices more likely to be agreed whereas prior to the budget announcement, buyers had to factor in stamp duty on top of their purchase price.
To work out how much stamp duty you’ll have to pay on a property, use this handy Stamp Duty calculator.
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