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First-time Buyers

Chancellor abolishes Stamp Duty for first-time buyers

Christina Hoghton
Written By:
Christina Hoghton
Posted:
Updated:
24/11/2017

The Chancellor’s heavily leaked ‘rabbit out of the hat’ in today’s Budget was the scrapping of Stamp Duty for first-time buyer purchases up to £300,000, effective from today.

In an unexpected twist he added that to ensure the relief also helps first-time buyers in very high price areas like London, it will also be available on the first £300,000 of the purchase price of properties up to £500,000.

This means an effective reduction of £5,000 for first-timers buying a home for half a million pounds, and an average saving of £1,500 for FTBs.

The Chancellor said that the measure would result in a Stamp Duty cut for 95% of all first-time buyers who pay Stamp Duty and no Stamp Duty at all for 80% of first-time buyers.

He said: “We send a message to the next generation that getting on the housing ladder is not just a dream of your parents’ past. But a reality for your future.”

Higher house prices?

Mark Hayward, chief executive, of NAEA Propertymark welcomed the move, He said: “The announcement today from the Government to abolish Stamp Duty for FTBs will have a positive impact on the market. It’s a smart move to ensure the dream of homeownership for young people can become a reality and will help buyers across the UK, including London and the South East where property prices are higher.”

But he cautioned that it could also increase the demand for FTB properties adding that “if we don’t have the supply it will push prices up.”

Lea Karasavvas, managing director of Prolific Mortgage Finance, said the tax cut wouldn’t help the housing market in the long-term. he explained: “Primary school children have taken a Stamp Duty bullet so millennials can get on the housing ladder.

“It is uncharacteristic of the Chancellor to kick the can down the road like this, given how much he has stressed in the past the importance of not saddling future generations with the cost of solving society’s current problems.

“The whole point of the housing crisis is that demand is too high relative to supply. Fiddling with the economic stop cock by effectively handing out free money only exacerbates the problem and won’t help buyers, brokers, lenders or sellers in the long run.”