CHANCELLOR Rishi Sunak’s stamp duty holiday means that homebuyers in England and Northern Ireland now only pay stamp duty on properties priced at £500,000 or more — up from £125,000 — making way for potentially huge savings. Analysis by property advisers Savills shows that someone buying an average home in England worth £248,000 now pays no stamp duty at all, while buyers of properties costing £500,000-plus will save the maximum £15,000.
The most significant saving is for home movers, though first-time buyers will also benefit. ‘With first-time buyers already exempt from stamp duty on properties up to £300,000, and a reduced rate of five per cent up to £500,000, this holiday is likely to affect next-time buyers more than first-time buyers,’ says Miles Robinson, head of mortgages at online mortgage broker Trussle.
The tax relief also applies to investors and second home buyers, though they are liable for a surcharge of three per cent of the property value. ‘These measures will enable those looking to buy a home to have the confidence and stability to be able to move forward with their purchase, which in turn will have a knock-on effect on the wider economy as people buy white goods and furniture,’ says Mark Hayward, chief executive of NAEA Propertymark, the professional body for estate agencies.
Nine out of ten property transactions across the country are now exempt from stamp duty, with buyers in pricier areas on track to save the most. Research from Midlands estate agency Barrows & Forrester indicates that the stamp duty holiday equates to a saving of £2,465 for the average buyer in England, while London buyers will save an average of £14,290.
‘The London market is the overall winner from this intervention on stamp duty,’ says Lucy Pendleton, property expert at independent estate agents James Pendleton. ‘It’s the only place in the country where buyers of all kinds will benefit en masse from more significant savings, simply because property is more expensive.’
Four out of five first-time buyers in London now pay zero stamp duty, compared with just a quarter previously. Rob Houghton, CEO of home moving quote specialists Reallymoving, says: ‘Those who feel encouraged to commit will make a considerable saving, which will increase their equity.’
These new measures should save aspiring owners’ time as well as money, according to James Munson, head of marketing at housing association Notting Hill Genesis. He says: ‘A stamp duty holiday could bring down the cost by as much as £10,000 for a first-time buyer on a home valued at £500,000. This has the potential to make a big difference in terms of the amount of time it takes to save up, and gives those who might not have access to the Bank of Mum and Dad a better chance of buying a home sooner rather than later.’
‘Not only will the stamp duty holiday assist first-time buyers, but it will also encourage existing homeowners to take the next step up on the ladder,’ says Karen Curtin, managing director at Graven Hill Village Development Company, the self-build community.
And Tim Nutt, group residential managing director of regional housebuilder Shanly Homes, adds: ‘We expect to see a flurry of activity, particularly from downsizers and second steppers who are set to be the real winners from the changes.’
Quids in: Home movers in pricey areas benefit most — the stamp duty bill is now £10,000 on this £700,000, four-bed home in Hanwell, London W7, down from £25,000. robertsonsmithandkempson.co.uk