Since the Stamp Duty Land Tax relief started in November 2017, 180,500 first-time buyers have saved a collective of £426 million.
HMRC recently released statistics for the third quarter of the year, which shows the majority of first-time homebuyers in England are seeing financial benefits from the changes to stamp duty thresholds. These cuts were implemented to reduce up-front costs for first-time buyers and to help them get on the property ladder.
Stamp duty – who pays what?
When a first-time buyer purchases a house for less than £300,000, they pay no Stamp Duty Land Tax. When the house price is between £300,000 and £500,000, first-time buyers pay less than standard rates only on the amount over £300,000.
The 2018 Budget included an additional boost with first-time buyers of shared ownership properties paying no stamp duty for properties costing up to £500,000.
The amount first-time homebuyers save largely depends on the region they’re buying in. The south, the east, and London saw the greatest savings due to higher property prices, while the stamp duty relief had less of an impact on those buying in the Midlands and the north.
First-time buyers reap additional benefits
The start of 2018 saw the highest number of mortgaged first-time buyers in more than decade, showing that stamp duty cuts are working. However, that’s not the only way first-time homebuyers are seeing benefits.
For example, the Help to Buy equity loan scheme is appealing to many who are buying property for the first time. Recent research shows nearly nine out of 10 completions using a Help to Buy scheme are from first-time buyers.
On top of that, there has been an upswing in mortgages being specifically targeted for first-time buyers, and mortgage rates are at a record low for this group of buyers. Additionally, developers are looking to capitalise on the first-time buyer market as it’s expected to grow more than any other home buying sector over the next few years.
The current subdued conditions of the UK property market could also give those buying property for the first time opportunities to negotiate more affordable prices.
With increasingly more options and benefits, it’s become an advantageous time for first-time homebuyers to hop on the property ladder.
