News: Budget 2017 Stamp Duty changes - our initial reaction
The Chancellor announced yesterday that from 22nd November Stamp Duty (SDLT) would be abolished for First Time Buyers up to £300,000.00 in England, Wales and Northern Ireland. For those First Time buyers purchasing up to £500,000.00, SDLT will only be payable on the balance between £300,00.00 and £500,000.00.
Given that 80% of first time buyers’ purchase below the £300k threshold this will potentially have a positive affect on the lower end of the market. Those purchasing a £200,000.00 home will save £1,500.00 and those purchasing at £450,000.00 will save £5,000.00.
We do have some reservations about the effect the changes will have on the overall market however. What we really needed was help for the middle/top market movers too. They are also struggling with the cost of moving and this might cause some stagnation and inevitable problems with supply and demand! What we don’t want to see is a cancelling out of the benefit with increased prices.
The new mortgage lending criteria brought in after the financial crisis of nearly ten years ago is here to stay. Purchasers are required to find larger deposits than they did before 2007 so any saving is potentially a positive step.
As the Chancellor said ‘there is no magic bullet’ to solve the housing crisis but anything that reduces the financial pressure on new purchasers and helps them bridge the deposit gap can only help.
Alex Britchfield | Partner | Davies & Partners