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. **
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.
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.
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.***
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
Caboodle Financial Services Ltd
240B Lichfield Road
Sutton Coldfield B74 2UD
Telephone: 0121 308 9114