First Time Buyer Stamp Duty Changes

In November last year the Government introduced stamp duty changes which meant first time buyers spending £300,000 or less on a purchase would not have to pay stamp duty (first time purchases between £300,000 and £500,000 would only pay stamp duty on anything over £300,000). 

This was done in the hope that more first time buyers, the most struggling in the property market, would be able to get onto the property ladder.  

Theresa May predicted that more than a million first time buyers would benefit from the changes over the next five years with the maximum saving being £5000.

So, nearly a year on has this made a difference to the first time buyers market?

Well the figures do show that the number of first time buyers in Britain is at a 12 year high. According to recent data published by Halifax, applications by first time buyers now make up 51% of all mortgage applications which is the highest it has been for more than a decade despite the average deposit currently standing at a staggering £33,127.00! 

But the question is, can we really put this down to the Stamp Duty changes or are there other factors involved when the number of first time buyers has been consistently rising for the last five years? 

One factor could be that we are seeing more and more parents and grandparents financially helping first time buyers get on to the property ladder.  Figures from the Office for National Statistics show that more than a third of first time buyers receive financial assistance from parents either by way of gift or loan. 

There is also the uncertainty of Brexit which is driving houses prices down, perhaps first time buyers are seizing the opportunity whilst they can.

So in reality it is hard to say whether the stamp duty changes have made a difference.

One thing is for sure though, stamp duty is one of the biggest disbursements when purchasing a house and any savings you can make at this time are welcome.  As the saying goes ‘every little helps’.