This afternoon the Chancellor Philip Hammond stood up to deliver one of the most tricky, anticipated budgets for some time, having moved the big day of the year from warm and promising Spring to cold and blowy Autumn – a portent of things to come?
This budget could be seen as the “Chess Game” Budget as Hammond had to play this one tactically, trying to appease different sides, avoid attacks and ultimately protect himself.
We were given pre-budget “leaks” as always and the biggest area of concentration was on the Housing Market, with a Government seemingly determined to tackle the ongoing housing issues that have blighted successive governments as well as make an attempt to win back the younger voters dismayed with the prospect of never being able to afford to get onto the housing ladder, especially in high demand areas like London. Stamp duty for First Time Buyers was the key policy to look out for.
For once, he did not disappoint and made a fundamental change to Stamp Duty for 1st Time Buyers.
Effective from now there will now be no charge on the first £300,000 for First Time Buyers purchasing property, for those buying up to £500,000.
They have defined a First time buyer as “someone who has never owned freehold or leasehold interest in a dwelling before and who is purchasing their only or main residence. Residential property anywhere in the world is counted when determining whether someone is a first-time buyer. Where there are joint purchasers, all purchasers would need to be first-time buyers.”
This means they will pay £5,000 less if buying between £300,000 and £500,000.
The table below shows the before and after cost:
Andrew Montlake, Director at Coreco Mortgage Brokers commented, “Many of our First-Time Buyer clients will be cheering this change from the rafters as they calculate the savings that they will make on buying their first property and for some this could well be the difference between purchasing a property or not, especially in high demand areas like London.
“This will almost halve the bill for the average FTB in London and provide further encouragement that the dream of owning their own home has been made slightly easier.
“However, this change does not help home-movers who are increasingly being put off moving due to spiralling costs and the important “downsizer”, the last time movers who will free up valuable housing stock and help unblock the system.
“We also have to guard against the potential for house prices to simply rise further to negate this gain, so whilst this is a welcome move, on its own it does not deal with the more serious issues facing the housing market and the lack of real, affordable homes available in the right areas.
“Whether the overall housing packages announced leads to anything more than a feigned determination of the Government to build more remains to be seen”.