According to data published by the Office for National Statistics (ONS), almost 500,000 homebuyers have benefitted from using one of the government’s Help to Buy schemes.
The data revealed that, since 2013, 494,108 transactions have taken place using a government Help to Buy scheme.
According to the data, first-time buyers accounted for 430,000 of the total Help to Buy completion rate. The ONS figures in regard to Help to Buy ISAs show that 194,379 completions have taken place since the launch of the ISA in December 2015.
The Help to Buy ISA provides a tax-free savings account for first-time buyers wishing to save for a home. Savings are limited to a monthly maximum of £200, with the option to deposit an additional £1,000 when the account is first opened. The government provides a 25% bonus on the total amount saved, including interest, capped at a maximum of £3,000, which is tax-free. The bonus can be put towards a first home with a purchase value of £450,000 or less in London, or £250,000 or less in the rest of the UK.
Meanwhile, since its launch in April 2013, the Help to Buy Equity Loan Scheme has helped 195,219 homebuyers to purchase property, according to the data.
Commenting on the figures, Chancellor Philip Hammond said: ‘This government supports those who dream of owning their own home and wants to help them take the first step onto the property ladder. That’s why we’ve cut stamp duty and extended the Help to Buy Equity Loan Scheme to run until March 2023, supporting half a million more home purchases.’
Figures recently published by HMRC have revealed a 3% increase in the number of first-time buyer relief (FTBR) claims from the previous quarter, with 78% of transactions paying no Stamp Duty Land Tax (SDLT) at all.
FTBR eliminates stamp duty for first-time buyers paying £300,000 or less for a residential property. Since the introduction of FTBR in the 2017 Autumn Budget, there have been a total of 241,300 FTBR claims, providing an estimated total relief amount of £570 million.
First-time buyers paying between £300,000 and £500,000 pay SDLT at 5% on the amount of the purchase price in excess of £300,000. Those purchasing property for more than £500,000 are not entitled to any relief and pay SDLT at the normal rates.
The Association of Accounting Technicians (AAT) recently suggested that FTBR will cost UK taxpayers £670 million by 2021/2022.
It has called for SDLT liability to be transferred from the buyer to the seller. The AAT argues that this would help people to move up the property ladder, and would assist those in the ‘most populated and expensive parts of the country’, such as London and the South East, where house prices are significantly high.
Phil Hall, Head of Public Affairs and Public Policy at the AAT, said: ‘Switching stamp duty liability from the buyer to the seller isn’t a silver bullet for our myriad housing problems, but it would make the system fairer because those moving up the ladder would be paying duty on the lower-priced house that they are selling, not the higher-price one they are buying.’
Data published by HMRC has revealed that first-time homebuyers have collectively ‘saved £426 million’ as a result of changes to Stamp Duty Land Tax (SDLT).
In the 2017 Autumn Budget, Chancellor Philip Hammond announced a new exemption from SDLT for most first-time homebuyers. From 22 November 2017, first-time buyers in England and Northern Ireland paying £300,000 or less for a residential property pay no SDLT.
First-time homebuyers paying between £300,000 and £500,000 pay SDLT at 5% on the amount of the purchase price in excess of £300,000. The relief only applies to purchases in England and Northern Ireland: SDLT is devolved in Wales and Scotland.
In the 2018 Autumn Budget, the Chancellor announced an extension to first-time buyers’ relief so that all qualifying shared ownership property purchasers can benefit, whether or not the purchaser elects to pay SDLT on the market value of the property.
This extension applies to relevant transactions with an effective date on or after 29 October 2018. It has also been backdated to 22 November 2017 so that those eligible who have not previously claimed first-time buyers’ relief are able to amend their return to claim a refund.
According to HMRC, more than 180,500 first-time homebuyers have so far benefitted from the changes to SDLT.
Mel Stride, Financial Secretary to the Treasury, said: ‘These statistics show that the government was right to offer a helping hand to first-time buyers. Without this investment, more than 180,500 new homeowners may have struggled to get onto the property ladder.’
The Chancellor’s decision to scrap stamp duty for first-time buyers has so far had a limited impact on the housing market, new research suggests.
In a survey carried out by the Royal Institution of Chartered Surveyors (RICS), 86% of respondents said they had not seen an increase in first-time buyer enquiries since the changes to stamp duty were announced in November’s Budget.
Latest figures show that activity in the housing market actually fell in December, although RICS acknowledged that this could be partly due to the time of year.
Since 22 November 2017 first-time buyers paying £300,000 or less for a residential property are exempt from paying stamp duty land tax.
When asked to consider the likely impact on the housing market over the coming months, 66% of those questioned said the measure would have ‘little consequence’, while 12% expected the change to have a positive effect.
Commenting on the survey’s findings, RICS chief economist Simon Rubinsohn, said: ‘The initial feedback from the market doesn’t suggest that the change in the stamp duty regime announced in the Budget is going to have a material impact on activity.
‘Indeed, the risk was always that a good portion of the benefit would be capitalised in the price, therefore limiting the benefit for the first-time buyer.’
However, while many property experts are expecting sales to remain weak over the coming three months, the picture for the rest of 2018 is looking more positive, with activity predicted to gain momentum across all regions during the rest of the year.
First-time buyers wishing to save for their first home within a Help to Buy ISA may be priced out of the Government scheme, a recent investigation by the BBC has found.
The Help to Buy ISA, introduced in December 2015, allows first-time buyers to get onto the property market by depositing money into a tax-free savings account, subsequently receiving a 25% Government bonus, up to a maximum of £3,000.
However, this 25% bonus is only applicable if the home purchased is below the national cap of £250,000, or £450,000 in London.
The investigation by the BBC has revealed that, in multiple areas around the country, the average price of a first-time home surpasses the purchase cap. Outside of London, the average price of a two-bed home exceeds the cap in 28% of areas.
The housing charity Shelter stated that the scheme only benefited ‘the lucky few’, and that the Government needs to direct more focus towards building new homes.
Commenting on the findings, a Treasury spokesperson stated: ‘The property price cap allows the Government to target support at those who are saving to buy their first home’.
In addition, the new Lifetime ISA, which is due to launch next year, will have a limit of up to £450,000 on house purchases. The scheme will permit prospective buyers to transfer their savings from a Help to Buy ISA into a Lifetime ISA.