Abolition of stamp duty for first-time homebuyers ‘benefits 69,000 households’

Abolition of stamp duty for first-time homebuyers ‘benefits 69,000 households’

The abolition of Stamp Duty Land Tax (SDLT) for first-time homebuyers of properties worth under £300,000 has ‘benefitted 69,000 households’, government data has suggested.

During the 2017 Autumn Budget on 22 November 2017, Chancellor Philip Hammond announced the abolition of SDLT, with immediate effect. From this time, most first-time buyers paying £300,000 or less for a residential property are no longer required to pay SDLT.

Official figures for the period to 31 March 2018 show 69,000 first-time homebuyers have ‘benefitted from the SDLT abolition’, saving an average of £2,300 each. The government stated that this is in line with its aim of ‘helping over one million people to get onto the housing ladder’ over the next five years.

Other initiatives introduced to help individuals to get onto the housing ladder have also seen a significant uptake, with more than 387,000 people using the government’s Help to Buy scheme, and over 1.1 million Help to Buy ISA accounts having been opened.

Commenting on the data, Mel Stride, Financial Secretary to the Treasury, said: ‘I’m proud that the cut to stamp duty for first-time buyers is helping to realise the dream of home ownership for a new generation, alongside building more homes in the right areas, and generous schemes such as the Lifetime ISA and Help to Buy.’

However, estate agent regulatory body NAEA Propertymark warned that the cost of purchasing a home for first-time buyers is ‘still very high’, with many individuals finding it ‘difficult to save for a deposit’.

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Stamp duty cut ‘fails to entice first-time buyers’, survey suggests

Stamp duty cut ‘fails to entice first-time buyers’, survey suggests

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.

Image result for Stamp duty cut fails to entice first-time buyers survey suggestsIn 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.

Autumn Budget stamp duty changes will have ‘modest impact’, says lender

Autumn Budget stamp duty changes will have ‘modest impact’, says lender

In a new report, building society Nationwide has stated that the Autumn Budget changes to Stamp Duty Land Tax (SDLT) for first-time homebuyers will have only a ‘modest impact’ on housing demand.

Image result for Autumn Budget stamp duty changes will have modest impact says lenderChancellor Philip Hammond abolished SDLT for first-time homebuyers in England, Northern Ireland and, temporarily, for those in Wales, from 22 November. The abolition applies for individuals seeking to purchase a first home worth up to £300,000. Wales will receive devolved stamp duty powers in April 2018, when its Land Transaction Tax (LTT) comes into effect.

To assist those in London and other expensive regions, the first £300,000 of the price of a home valued at £500,000 will be exempt from SDLT for first-time homebuyers.

Different rules apply in Scotland, where the Land and Buildings Transaction Tax (LBTT) is applicable.

Commenting on the report, Robert Gardner, Chief Economist at Nationwide, said: ‘The decision in the Budget to abolish stamp duty for first-time buyers purchasing a property up to £300,000 (with relief for those purchasing a property up to £500,000) is likely to have only a modest impact on overall demand.

‘In many regions, first-time buyers already paid little or no stamp duty as the price of the typical first-time buyer property was below the previous threshold of £125,000.’

Meanwhile, the Office for Budget Responsibility (OBR) warned that the abolition of SDLT for first-time buyers could result in higher house prices, as prospective buyers will have more money to put towards a deposit.

View our 2017 Autumn Budget Report

Chancellor Philip Hammond delivered his 2017 Autumn Budget speech yesterday, outlining a range of tax and financial measures.

Mr Hammond’s speech unveiled a raft of amendments, including scrapping Stamp Duty Land Tax (SDLT) for first-time homebuyers, an increase in the personal allowance (PA) to £11,850 from April 2018 and concessions for firms affected by the business rates ‘staircase tax’.

Further details regarding the announcements made by the Chancellor featured in the official press releases. Our comprehensive Budget Summary outlines the key measures, including some of the less-publicised changes that may impact upon your business or personal finances.

For a detailed overview of the Autumn Budget information, please read our 2017 Autumn Budget Summary.

Wales set to receive income tax powers in 2019

In a devolutionary deal similar to the one granted to the Scottish government, the Welsh government has been given new powers to set its own rates of income tax from April 2019, as part of an arrangement with the UK Treasury.

The amount of capital borrowing available to the Welsh government will also double to total £1 billion.

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The Welsh government has already been given stamp duty powers: it will replace the stamp duty land tax (SDLT) currently charged in the rest of England with its own land transaction tax (LTT) and landfill tax from April 2018.

The Welsh government’s Cabinet Secretary for Finance and Local Government, Mark Drakeford, commented: ‘This is an agreement which is fair to Wales and the rest of the UK.

‘It ensures fair funding for Wales for the long-term, something we have consistently made the case for.

‘But crucially it protects our budget from the range of undue risks that could arise following the devolution of tax powers from 2018 and provides additional flexibility to manage our resources.’

Meanwhile, David Gauke, Chief Secretary to the Treasury, stated: ‘We are delivering on our commitments and the Welsh government can now decide how to use their greater powers and responsibilities to grow and support the Welsh economy.’

Property sales plummet after stamp duty changes, says HMRC

The number of UK properties sold fell by 45% between March and April as stamp duty changes came into effect, according to official figures from HM Revenue & Customs (HMRC).

Since 1 April 2016, those buying an additional property, such as a second home or a buy-to-let, have been required to pay an additional 3% stamp duty surcharge. This led to a rush to bring forward property purchases before the surcharge was introduced, and March saw a record high of 164,400 transactions.

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By contrast, just 94,370 properties in total were sold in April, and the number of residential properties sold – 84,280 – was the lowest for three years. Compared to April last year, the number of transactions was down by 14.5%.

The stamp duty surcharge for second homes was announced as part of Chancellor George Osborne’s 2015 Autumn Statement. It is expected to boost Treasury coffers by some £1 billion by the year 2021, but there have been many critics of the change, who argue that the measure will damage investment in property.

Andy Sommerville, director of Search Acumen, said: ‘A 45% month-on-month drop in transactions is a powerful testament to how Government reform can alter forecasts and sway public attitude.

‘Whilst the spike in March more than makes up for the fall in April, what is worrying is that this dip is not just the consequence of buy-to-let landlords and second homeowners clearing transactions ahead of April. It’s also the result of people trying to find their bearings, preferably even trying to stay away from the market as Brexit speculation grows louder.

‘The Chancellor, in efforts to sway voters to stay, has predicted economic shock and plummeting house prices in the event of the UK leaving the EU, while others believe falling house prices could be a good thing. Either way, the uncertainty is stagnating the market. This is likely to continue well into June, with transactions picking up once there is greater clarity on the UK’s direction.’

House price growth to slow over coming months

UK house price inflation is set to slow within the next few months, a Royal Institution of Chartered Surveyors (RICS) survey has suggested.

house for sale

The survey revealed that factors such as the recent changes to Stamp Duty and the upcoming EU referendum, alongside local elections in Wales, Scotland and Northern Ireland could potentially lead to a slowdown in the housing market.

Simon Rubinsohn, RICS Chief Economist, said: ‘Elections inevitably bring with them periods of uncertainty in the market, and our figures would suggest that next May’s devolved elections are no exception’.

The survey suggested that surveyors in London expect house prices to experience a fall over the next three months, instead of just slowing down.

However, survey respondents in North West England and Northern Ireland were more optimistic: many expect prices to rise over spring and early summer.

In the longer term, the RICS predicts that house prices will rise by more than 4% a year in England and Wales.