3 in 10 first-time buyers unaware of Stamp Duty changes
The rule change means that first-time buyers pay zero Stamp Duty on the first £300,000 of any home that costs up to £500,000.
According to research carried out by L&C Mortgages, two thirds (65%) of first-time buyers in England know something about the changes, but only 18% describe themselves as knowing a lot or a reasonable amount.
L&C spokesperson David Hollingworth, said: “There’s still some work to be done by the government, and the wider market, to educate first-time buyers and address the lack of understanding of the benefit of the Stamp Duty relief. Those looking to get on the ladder have been offered a small light at the end of what is considered to be quite a dark tunnel, but if the government doesn’t work harder to illuminate what is on offer then many won’t even be aware that this help is available.”
The research also found that, given likely property price increases, four million more houses in England will be priced beyond the £500,000 threshold within a decade.
According to L&C’s projections, London is set to be hardest hit, with over half (51%) of the 52,002 properties now qualifying for a Stamp Duty cut for a first-time buyer rising past the price bracket specified by the allowance. L&C calculates that the total proportion of properties that would benefit from the Stamp Duty cut will drop from 57% to 28%. Nottingham should have the largest number of properties falling into the tax-free bracket for first-time buyers over the next ten years. The proportion of properties here that could receive a discount from this tax change would rise from 51% to 73%.
David Hollingworth said: “It’s alarming that in cities in the South, so few properties will see any type of benefit from the Stamp Duty changes in 10 years’ time. As a priority the government needs to ensure that there is a plan in place to review the relief bands, to guarantee sustained support for would-be home owners now and in the future. Going even further, abolishing stamp duty for first-time buyers altogether would help all those looking to get on the ladder, with one less expense to worry about. Our research shows that many of the first-time buyers, especially those based in southern England, who are set to pay less or nothing will need to act fast before many of the properties currently eligible fall out of the price bracket that qualifies for the cut.”