What do stamp duty changes really mean for first-time buyers?
PUBLISHED: 07:30 23 November 2017 | UPDATED: 18:36 23 November 2017
Chancellor Philip Hammond's decision to scrap stamp duty for first-time buyers paying up to £300,000 for a property has met with a mixed response.
The move – effective immediately – will see first-time buyers in “very high-price areas like London” paying no stamp duty on the first £300,000 of properties priced up to half a million.
The effective reduction for anyone spending £500,000 would be £5,000, down from £15,000 to £10,000.
The Chancellor said that 95 per cent of all first-time buyers would benefit from the change, with 80 per cent of them set to pay no stamp duty at all as a result.
While critics believe that the changes aren’t radical enough to make a major difference, Rightmove director and housing market analyst Miles Shipside urged first-time buyers to make the most of what’s being offered – and fast.
He said: “First-time-buyers should think about acting quickly to take advantage of this stamp duty ban, before the extra demand it creates pushes up prices and starts to eat away at the extra cash this stamp duty exemption will free up.
“The Government has already put buy-to-let landlords on the back foot with its 3 per cent stamp duty surcharge, so this extra advantage of no stamp duty gives first-time-buyers an extra edge.
He added: “Speed and getting in early is important for aspiring first-time-buyers because supply of suitable properties is limited due to insufficient numbers of new build property in this sector over the last decade.
“To take advantage of the initial momentum this will generate, owners of properties that are suitable for first-time buyers should think about coming to market if they have been thinking about making a move up the ladder themselves.”
Mr Hammond also pledged £44 billion to build 300,000 homes a year by the mid 2020s.
Enfield-based developer Fairview New Homes, which builds in London and the Home Counties, is hopeful that the budget will prompt a fresh surge of activity in the housing market.
Jeremy Gee, main board director at Fairview New Homes, said: “Stamp duty can be a barrier to people entering the housing market, particularly first-time buyers, so this is an extremely significant intervention from the Chancellor which will make it more affordable for people to get on to the property ladder.”
But Ian Denton, partner in charge of Jackson-Stops’ Woburn office, had reservations about just how much difference these changes would make.
He said: “Without concerted efforts to build more homes, accompanied with a resulting upturn in housing completions, the change to stamp duty today is a sticking plaster on our broken housing market.
“Similarly, penalising empty home owners with a 100 per cent council tax premium is unlikely to really be a deterrent for people who are likely to be high net worth. If they don’t need the rent, this penalty probably won’t bother them either!
“The Chancellor’s various strategies for increasing building must now start to yield results, and quickly, with many more completions of homes suited to a range of life stages and needs.”