Yesterday’s Budget may have painted a grim picture of the nation’s stuttering economy but there was an early Christmas present for first-time buyers, who will no longer have to fork out Stamp Duty on homes up to the value of £300,000.
Chancellor Philip Hammond said the move was designed to make home-owning a reality, not just a dream for those currently priced out of the market.
Previosuly, Stamp Duty was paid on all residential properties worth more than £125,000, levied at a staggered rate above that threshold, starting at 2% but increasing in line with the value of the property.
What’s changed – and what will it mean in Suffolk?
Stamp Duty has been axed entirely for first-time buyers purchasing houses worth up to £300,000. For properties costing up to £500,000, no stamp duty will be paid on the first £300,000.
Mr Hammond said this meant 95% of first-time buyers would see stamp duty cut, while 80% would pay none at all.
The average house price in Suffolk is around £230,000. Previously, first-time buyers would have paid £2,100 for a property of this value – but not any more.
Nationally, estate agent Savills estimates that the average Stamp Duty bill for first-time buyers is about £2,700. Buyers who spend £500,000 could save up to £5,000.
The policy will cost the Treasury £3.2bn over the next five years.
What do the experts say?
The Office for Budget Responsibility said the main beneficiaries would be existing homeowners, rather than first-time buyers, because it expects all house prices to rise by 0.3% within a year as a result of the change.
It also estimates that it will result in only an additional 3,500 first-time buyer purchases. This is because for first-time buyers, the deposit is a bigger up-front cost than Stamp Duty. The average deposit across the UK is £32,899, according to the Halifax.
However, the Chancellor insists that young people will benefit.
“This is our plan to deliver on the pledge we have made to the next generation that the dream of home ownership will become a reality in this country once again,” Mr Hammond said.
How can Gotelee help?
Buying a home for the first time is one the most exciting things you will ever do. However, the conveyancing procedure can be very stressful.
At Gotelee, our conveyancing team can take the stress out of house buying, offering guidance and expert advice at every step of the process.