Impact of Autumn Budget Stamp Duty Cut
As we move into 2018, it will be interesting to see the full impact of the Autumn Budget stamp duty cut. This move may have been a surprise for many people but it seems as though there is a wide range of opinions about this change. The abolition of stamp duty for first time buyers for properties priced less than £300,000 was seen as a positive move to help people get on to the property ladder but as you would expect, not everyone has backed the move.
In all likelihood, the cut will impact on different people in different ways. There will be some people who are genuinely assisted by the cut and there will be people who lose out because of the change. There will also be people who are unaffected, so it is important that you consider any personal impact of the changes.
Clearly the removal of stamp duty, and the changes for first time buyers when purchasing property priced between £300,000 and £500,000, will have an impact on the market.
Not everyone believes the stamp duty cut will be of benefit
However, not everyone believes that the changes will be positive. The Office for Budget Responsibility, the OBR, believes that this cut will actually see property prices rising by a level of 0.03%; which could equate to a like-for-like basis in comparison with the stamp duty cut. This means that many first time buyers may not be financially better off, but there could be an obvious benefit that comes from this change.
With the removal of stamp duty, which is an upfront cost that needs to be paid at the time of buying the property, the buyer should have more money at their disposal at this point. This should help the buyer create a bigger deposit, which can help them to obtain a more attractive mortgage. In fact, it may even help some property buyers to obtain a mortgage, so in this regard, the removal of stamp duty for first time buyers could have a very positive impact.
Certain groups may benefit from this stamp duty cut
A number of property specialists believe the move will have the most impact on first time buyers who don’t have a large deposit or who hold lower income roles, and given that these groups require assistance in getting on to the property ladder, the cut can still be seen as a positive one, which should justify the decision.
There have been some accusations that the stamp duty cut will actually be of more benefit to current property owners as opposed to first time buyers. If the predicted rise in property prices occurs, this could be the case. However, given that the seller will then more than likely buy a new house of their own, they will probably have to pay a higher price too. This means that the only people who would benefit from this turn of affairs would be property sellers who don’t have to buy a new home.
With so many factors influencing the property market, the removal of stamp duty for first time buyers is just one aspect to consider. However, there is no denying that some people will find that this change will impact on their next move in the property market. Whatever you are looking to do, come and speak to Liberty Gate and we will ensure you receive the support and guidance you need.