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90% FTBs saved from stamp duty since holiday

90% FTBs saved from stamp duty since holiday

Category: Mortgages

Updated: 15/02/2012
First Published: 15/02/2012

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Nine in ten first time buyers have not had to pay any stamp duty since the soon-to-end holiday began, new research has revealed.

According to figures released by HSBC, of the 331,899 first time buyer loans taken out between the start of the stamp duty holiday on 24 March 2010 and the end of 2011, 89% were for properties priced under £250,000 and therefore exempt from the tax.

Around half of all buyers in that period who would otherwise have been liable to pay the additional tax benefited directly from the stamp duty holiday by buying their first home priced between £125,000 and £250,000.

The bank said it had seen a 20% increase in approvals for first time buyer loans in the first six weeks of the year as buyers rush to take advantage of the holiday which is set to draw to a close on 24 March 2012.

Meanwhile, separate figures from Santander suggest first time buyers have saved an estimated £319 million as a result of the stamp duty holiday.

The bank is urging first time buyers to act fast if they still wish to take advantage of the tax holiday, after which first time home owners can expect to pay 1% tax on property purchases between £125,000 and £250,000 and a 3% on purchases over £250,000.

The exemption has been saving first time buyers up to £2,500 in stamp duty fees.

"Getting a foot on the ladder is tough task for first time buyers against the backdrop of a sluggish property market," said Phil Cliff, director of Santander Mortgages.

"Despite the availability of some very affordable mortgage deals, that extra £2,500 can make a huge difference to a financially stretched first time home buyer.

"The end of the stamp duty tax holiday is looming so we're urging new buyers who are in the process of purchasing a home or even those hoping to do so in the immediate future to act fast and make sure all parties, including solicitors and sellers are well aware of the deadline."

The Council of Mortgage Lenders (CML) has predicted that first time buyer transactions will pick up as the concession end date looms nearer.

"For those who miss the deadline, the credit constrained environment we find ourselves in means first time buyers will increasingly have to fund stamp duty from their back pockets so the end of the concession will have a real impact," added CML chief economist Bob Pannell.

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