The Chancellor of the Exchequer announced a stamp duty holiday back in autumn 2017 for first-time buyers. Under much pressure to ease the housing crisis, Andrew Hammond agreed to remove stamp duty for first-time buyers on properties worth less than £300,000. With the average home in the UK now worth £232,000, this was a much-needed financial break for the many first-time buyers in the UK who have been struggling to get themselves on the property ladder.

Image Credit

Stamp Duty Changes

The change has had such a good effect that in the time between the autumn 2017 budget and June 2018, over 120,000 first-time buyers were able to purchase their new homes without making a stamp duty payment. For everybody else duty remains at 2% for properties worth between £125000 and £250,000 and 5% on properties worth between £250,001 and £925,000. This means that someone purchasing a home for the average UK price of £230,000 would have to pay around £4,600, and someone who fell into the next bracket with a house worth just over £250,000 would pay around £10,000. As a first-time buyer they won’t have to pay any stamp duty at all.

Time to Buy

The Chancellor has not put forward any plans to reinstate stamp duty for first-time buyers, so for now as least prospective buyers looking for properties under £300,000 do not need to factor in this additional charge as they save for their first homes. Interest rates have, however, risen by 0.25% up to 0.75%, but asking prices have stabilized and in some places dropped by as much as £26,000, making now a great time to buy.

Image Credit

Cheltenham accountants such as would advise first-time buyers to take advantage of the stamp duty holiday because it can reduce your overall costs when it comes to buying a new home. The average cost of a first-time buy is £210,000, which means under the new stamp duty holiday the amount to pay has dropped from £4200 to nothing. That’s a boost for first-time buyers, who can put that money towards their deposit, the cost of conveyancing or perhaps refurbishment.

The stamp duty changes are a significant shift in the government’s policy on home ownership, although there are still many calls for more affordable housing for all.