First-time buyers helped by stamp duty cuts.

Monday, January 22nd, 2018

In a recent speech, Prime Minister Theresa May announced that the stamp duty cut for first-time buyers has already helped around 16,000 people in the six weeks since its inception, alongside a prediction that it would further benefit one million first-time buyers over the next five years. **

A confidence boost for first time buyers?

In November’s budget, the government abolished stamp duty for all first-time buyer purchases up to a maximum price of £300,000. This appears to have significantly improved the confidence of potential first-time buyers and we believe that consequently, many more will regain their interest in buying their first home.

The new stamp duty relief rules are also available on the first £300,000 of properties valued up to £500,000, meaning an effective reduction in stamp duty costs of £5,000 for first-time buyers purchasing in higher price areas such as London.

Mortgage Brokers can help navigate the ‘mortgage maze’

In our experience, many first-time buyers value the services of a mortgage broker to help guide them through the property buying process and what can often be described as a ‘mortgage maze’. Although the stamp duty cuts are helpful, there are still many other factors to be taken into consideration, including raising the mortgage required to buy the property in question.

No stamp duty for 80% of first time buyers

Chancellor Philip Hammond also said that the changes will effectively result in a stamp duty cut for the 95% of all first-time buyers who will pay stamp duty, and that 80% of first-time buyers will now pay no stamp duty at all. **

In her speech, Theresa May went on to reinforce that the changes have had an “immediate impact”, stating, “I have made it my personal mission to build the homes this country needs so we can restore the dream of home ownership for people up and down the UK.”**

Although the stamp duty cuts are an obvious positive for first-time buyers, the base rate increase and the reduction of mortgage product availability in the 90% and 95% loan-to-value sectors have reduced the overall impact. A recent Moneyfacts report indicated that mortgage product availability has fallen almost 7% from its peak in October 2017.***

Professional mortgage advice, the best decision a first-time buyer can make?

However, we believe the mortgage market is still in a confident mood and as such there are still many products available for first-time buyers to apply for. Finding the most suitable one may not be as straightforward though and using a professional mortgage broker to source and process the mortgage needed to get on to ‘the first rung of the ladder’ may prove to be the best decision any first-time buyer could make.

The team here at Caboodle Finance of Sutton Coldfield, Birmingham are available to help. For more information, call 0121 308 9114 today or alternatively just click HERE to email us.

 

** Source: Financial Reporter 03/01/18
*** Source: Financial Reporter 08/01/18

THINK CAREFULLY BEFORE SECURING OTHER DEBTS AGAINST YOUR HOME. YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON A MORTGAGE OR ANY OTHER DEBT SECURED ON IT. CONSOLIDATING DEBTS MAY INCREASE THE TERM AND TOTAL AMOUNT PAYABLE.

Your initial consultation is free and you are under no obligation to proceed with a mortgage we recommend. There will be a fee for mortgage advice. The exact fee will depend on your circumstances and may be reduced depending on the loan amount and any commission we receive from the lender. It is estimated that the fee will be £595, but it may range from £495 to 1% of the amount you borrow. The fee is only payable on completion and can normally be added to the mortgage. This will be discussed and agreed with you before you make an application. Please ask for a personalised illustration.

Secured loan rates from 3.95% APRC, although we have plans available up to 29.9% APRC which allow us to assist customers with the most severe credit problems. The overall cost for comparison is 7.65% APRC. For secured loans a broker fee up to 10% of the loan amount borrowed may be payable on successful completion. A lender fee may also apply. The actual APRC available will depend on your circumstances. All loans are subject to status. Please ask for a personalised illustration.

The guidance and/or advice contained in this website is subject to UK regulatory regime and is therefore restricted to consumers based in the UK.

Caboodle Financial Services Ltd, registered in England at SQ2 House, 240b Lichfield Road, Four Oaks, Sutton Coldfield, West Midlands B74 2UD (number 08044670).
Caboodle Financial Services Ltd is an appointed representative of Pink Home Loans, Pink Home loans is a trading style of Advance Mortgage Funding Limited, which is authorised and regulated by the Financial Conduct Authority (FRN 305008) for mortgage and non-investment insurance advice.
The Financial Conduct Authority does not regulate some forms of Buy to Let.

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