First-time buyers 'only worse off in London'
First-time buyers will be better off buying than renting everywhere in England and Wales except London as a result of the stamp duty change, according to new research.
Chancellor Philip Hammond announced in the Budget that first-time buyers would be exempt from paying stamp duty on any home priced up to £300,000, with a special London provision that the first £300,000 on homes priced up to half a million pounds would be free, with a five per cent levy for the next £200,000.
A study by Halifax found this would mean first-time buyers of the average home outside the capital would pay nothing, as none of the typical prices are as high as £300,000.
In London, a buyer purchasing an average priced home - costing £421,216 - would have paid £11,060 under the old stamp duty rules but would now be charged £6,060. However, Halifax figures showed renting in London is still less expensive than buying.
That would still be a larger saving than that enjoyed by the average buyer in the south east, the next most expensive region, where £3,948 would be saved by someone purchasing a home priced at the regional mean figure of £278,965.
In less expensive areas the savings are smaller, with cheaper housing in Wales meaning the average first-time buyer will only save £285. In Scotland, stamp duty has been replaced with the Land and Buildings Transaction Tax and it will be up to Holyrood to decide if it will change this in response tothe new measure in England and Wales.
Mortgages director at the Halifax Jasjyot Singh said the stamp duty change should be a "real boost" to first-time buyers, adding: "The number of first-time buyers getting on the housing ladder has now exceeded 150,000 for the third time in four years, a level of momentum not seen since before the financial crisis."
However, he noted, that doesn't mean the large numbers of people who rent and have yet to get on the housing ladder will all suddenly be able to afford to buy overnight; he pointed out that they still have to find an average deposit of £32,000.