Chancellor Philip Hammond has used today’s Budget to announce the immediate removal of stamp duty for first-time buyers on purchases up to £300,000.
With a substantial amount of money pledged to the new homes market in terms of funding for new homes, SME housebuilders, planning and workforce training in this year’s Budget, this new policy towards first-time buyers will perhaps cause the loudest cheer nationally, as it did in the House of Commons.
With immediate effect, those buying their first home will not have to pay any stamp duty on homes valued up to £300,000, and nothing on the first £300,000 of a home valued up to £500,000.
Reaction has been strong across the property industry:
Martin Walshe, head of new homes for Cheffins: “Any help we can give to first-time buyers to alleviate the burden of finding high deposits as well as footing the bills for all other moving costs should be considered. The issue in the main however, is the actual pricing of homes coupled with the severe lack of affordable property and unfortunately, cutting stamp duty cannot help that.”
Steve Midgley, MD of Fairgrove Homes and director of the East Midlands Chamber of Commerce: “Scrapping stamp duty for first-time buyers is excellent news, and will provide a much-needed boost to the market. But an extension of the government's Help to Buy scheme beyond 2020 would also have been useful.”
Darius Ziatabari, co-founder of Equinox Living: “Along with the continued Help to Buy scheme, the abolition of stamp duty for first-time buyers up to £300,000 will be very effective in terms of boosting activity. However, it would also be wise for the government to address a reduction in stamp duty in properties over £1m, as well as the excessive levy on buy-to-lets, which has crushed liquidity in these markets.”
Parul Scampion, COO for Fruition Properties: “This will go one step towards creating a healthy, frictionless process which will increase liquidity in the housing market and therefore mobility for the job market; both of which are important factors for a thriving economy. However, given the large revenues being earned by HMRC from SDLT [stamp duty], we believe the government needs to go further reducing the drag on higher value properties and investors - important elements of a healthy, properly functioning property market.”
Jeremy Gee, main board director at Fairview New Homes: “Stamp duty can be a barrier to people entering the housing market, particularly first-time buyers, so this is an extremely significant intervention from the Chancellor which will make it more affordable for people to get on to the property ladder.”
Alan Brown, chief executive of CALA Homes:“The ongoing focus on first-time buyers is misguided. The abolition of stamp duty on purchases up to £300k with a similar commitment for the first £300k up to £500k being exempt from SDLT is all well and good but where is the support for UK families? First-time buyers already have Help to Buy, did they really need this as well? The continued focus on just one end of the housing spectrum risks exacerbating the issues we are already seeing further up the housing chain with a significant dearth of quality, three- to five-bed housing available to second- and third-time buyers.”
Bjorn Howard, group CEO of Aster Group: ““Policy updates like the removal of stamp duty for first-time buyers are positive steps. We look forward to seeing how some of the key ideas mooted in the housing white paper, such as an increased focus on Shared Ownership, will be acted on.Housing is increasingly a point of division in society. Remedying this depends on tackling affordability and choice in the market, including greater availability of alternatives to traditional rent and homeownership options, such as shared ownership. This is where housing associations, alongside local councils empowered by greater borrowing freedom, can play an important role in increasing the number of affordable homes across the UK.”
Chris Taylor, managing director for Regency Residential: “I welcome the proposed cuts to stamp duty for first-time buyers, if ultimately it will make it easier for people to save for a deposit. A typical deposit for a mortgage is 10% on a house valued at £240,000, which includes a staggering £4,800 for stamp duty. Essentially, we’re currently talking about people saving for an average of 24 months before they can get on the property ladder. This clearly needs to change.”
Nick Sanderson, CEO for Audley Group: “Cutting stamp duty for first-time buyers will save them thousands of pounds on the purchase of their first homes and will remove one of the many barriers in the purchase market against consistently rising house prices. But the focus on the bottom end of the market alone is a blinkered focus and continues to ignore where much of the greatest potential in the market sits: the over-65s. It’s time to address the facts: if we truly want to kick-start movement in the market, we need to stop continually plastering over the cracks and invest in quality housing options for the older generation.”
Katherine McCullough, development director for Merchant Land: “The stamp duty exemption for buyers of properties up to the value of £300,000 and for the first £300,000 on a property priced up to £500,000 is great news for the housing market and a promising sign that vigour will return to the sector. We can also expect to see momentum building at the top end as a result, which will allow the rest of the market to move more freely, stimulating transactions at all levels.”
Nick Leeming, chairman at Jackson-Stops: “First-time buyers struggling to save enough to take their first step on the property ladder will be celebrating the break the Chancellor has given them today. I do feel the Chancellor has missed a trick by failing to reduce stamp duty levels across the board. The housing market must be viewed as a whole and comprehensive stamp duty reform would have increased overall fluidity to the benefit of all buyers.”
Jonathan Stephens of Surrenden Invest: “The abolition of stamp duty for first-time buyers on properties up to £300,000 is of course good news as this will enable those looking to get onto the ladder a long-overdue helping hand. Interestingly we, an investment agency, have been selling an increasing number of properties in the UK's major cities to first-time buyers over the last three to four months and in light of this new ruling on stamp duty, expect to do so even more in the coming months and years.”
Henry Smith, CEO of Aitch Group: “Those buying at £300,000 will save £5,000 and those buying at £500,000 and under will also save thousands. If this is coupled with the Help to Buy initiative, buying your first home will become significantly more affordable. We look forward to seeing the final details when published. The news will come as a boost for London in particular, which has a number of emerging areas that rely heavily upon the presence of first-time buyers. There is still more to be done and the limit could have been increased, but we welcome any intervention that will encourage increased transaction levels.”
Nicholas Harris, chief executive of Stonewater: “We’re also pleased to see a commitment to helping young people get a foot on the property ladder with the removal of stamp duty for first time buyers, and £125m of rent relief funding for those who are really struggling to afford their accommodation costs.”
Neil Knight, business development director, Spicerhaart: “The abolition of stamp duty for first-time-buyers buying properties under £300,000 and extra investment committed to improving construction skills are way overdue.”
Ian Fletcher, director of real estate policy for the British Property Federation: “We welcome the Chancellor’s support for first-time buyers. However, the bigger prize is to use changes to SDLT strategically to stimulate supply, which the Chancellor has failed to do in his Budget this year.”
Nick Leavey, partner and head of commercial property at Coffin Mew: “Although scrapping stamp duty for qualifying first time buyers might seem bold, it will simply increase demand in the short term with no corresponding increase in supply, leading to higher house prices and land values.”
Henry Fordham, Bellis Homes: "Although abolishing stamp duty for first-time buyers is a positive step, it being limited to £300,000 means its impact is minimised in many areas where many young professionals are required to work and live, such as London and linked commuting areas. I feel the Chancellor should have committed to his consideration of a temporary stamp duty holiday. Such a measure would of ensured the most immediate catalyst across the market and country as a whole to the benefit of the economy.”
John Elliott, managing director of Millwood Designer Homes: “It was of course good news to learn about the abolishment of the stamp duty land tax for first-time buyer purchases up to £300,000. This will certainly have a positive and significant effect on the lower end of the market and every little helps. I do believe the Chancellor needs to also help the top end of the market too, as a there is a blockage which needs to be cleared. As Sajid Javid has previously suggested, older generation’s need to downsize, but this is currently not feasible, as the top end of the market is stagnant entirely due to the penal and excessive stamp duty levy.”
Rory O’Neill, head of residential at Carter Jonas: “The abolition of stamp duty for first-time buyers is of course a welcome announcement in the Autumn Budget. It’s a political move too – in part an attempt to engage the disenfranchised young electorate, of whom the Tories have struggled to win any allegiance of late, but also to re-engage their often-beleaguered parents who have been footing the bill of leveraging their offspring onto the property ladder. The Chancellor has potentially missed a trick in failing to incentivise empty-nesters and prospective downsizers, many of whom retain their four- and five-bedroom homes without filling them, at the expense of the second-steppers’ ability to upsize.”
Jane Ashcroft, chief executive of Anchor: “The government needs to drastically overhaul parts of its housing strategy to reflect the fact that many older people would like to downsize but are prevented from doing so. Helping people to climb up the housing ladder is important but it’s crucial that older people looking to downsize are helped too.”
Glynis Frew, chief executive of Hunters Property plc: “We are pleased with the reduction of stamp duty for first time buyers up to £300,000, although we would argue that the duty needs an overhaul at all levels of the market. First-time buyers, downsizers and landlords have all suffered due to this extortionate cost.”
Greg Hill, deputy chief executive at Hill: “In London and the South East, where affordability is a key issue for this demographic, this will be particularly welcome for those purchasing under the £500,000 threshold, yet it is disappointing to see the rest of the market neglected, including second-steppers and downsizers, who will continue to find it difficult to buy a home that best fits their needs under the current stamp duty regime.”
Gwyn Jones, commercial director at Macbryde Homes: “The abolition of stamp duty on properties up to £300,000 in value for first-time buyers will make a huge difference to many thousands of home purchasers taking their first step on to the property ladder. We look forward to welcoming some of these in to a new
Will Herrmann, managing director of West Eleven: “The fact that stamp duty will remain the same for the rest of homeowners means there is still a sense of impossibility for many to move on. If it is still cheaper to extend the family home as opposed to upsize, there will always be a stagnation that will affect first-time buyers”.