Expert Comments On News That First Time Buyers Will Pay No Stamp Duty On Properties Up To 300k
In the Budget today Philip Hammond announced that he was abolishing stamp duty for first-time buyers on purchases up to £300,000.
This will also apply to the first £300,000 on properties worth up to £500,000 which recognises the value of properties in the South.
Expert Opinion“The abolition of stamp duty for first-time buyers will be a welcome windfall for many young people. This will make the costs of buying significantly lower for first time buyers of properties that cost between £125,000 and £300,000, who will definitely notice the difference. It’s also great to see the government recognising markets that are more expensive by providing more expensive areas with additional relief.
It is hoped that ending speculation over what measures the Chancellor had up his sleeve and the boost this measure give to first time buyers will assist the housing market to begin to shift out of the stagnation it has seen in recent years. Second and third stage movers may also suddenly find themselves with more buyers, and Lenders will appreciate that additional costs won’t be the same for first-time buyers. Affordability will improve, as well as making the actual acquisition less painful. However the provision will further increase the gap between first time buyers and buy to let investors, who pay the additional 3% surcharge as well as missing out on the Chancellor’s latest give-away.
While this is an excellent opportunity for young people, it may increase pressure on the Bank of Mum and Dad in the longer term, perhaps with less security for them. It doesn’t change the fact potential buyers need a big deposit, but it does affect how parents can help their children as first-time buyers.
Changes to Stamp Duty Land Tax rarely work entirely in the way governments intend them to. This could lead to some prices going up, and sellers digging their heels in on price when dealing with first-time buyers – working exactly against what it intended to do. Plus more sales can lead to house prices going up, if demand outstrips supply.
This won’t be an overnight solution for everybody, but the government is addressing intergenerational fairness. It is a win for both the government and young people.” Jeremy Raj - Partner