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FTBs urged to beat stamp duty holiday deadline

FTBs urged to beat stamp duty holiday deadline

Category: Mortgages

Updated: 31/12/2012
First Published: 24/01/2012

MONEYFACTS ARCHIVE
This article was correct at the time of publication. It is now over 6 months old so the content may be out of date.

First time buyers have been urged to move fast if they want to beat the stamp duty holiday deadline which is fast approaching.

The holiday on stamp duty for first time buyers on properties worth up to £250,000 was introduced last year in an effort to get the market moving again.

However, buyers who are keen to make the most of the offer face a race against time, as the initiative comes to an end on 24 March 2012.

After the tax exemption has come to an end first time buyers will face a tax of 1% on house purchases between £125,000 and £250,000, and 3% on purchases over £250,000, potentially adding thousands of pounds to the cost of a mortgage deal.

"With only two months remaining, first time buyers must act quickly to avoid paying Stamp Duty Land Tax on their first home purchase," Wendy Evans Scott, president of the National Association of Estate Agents (NAEA), said.

"If you're currently in a chain and waiting to complete your purchase then make sure that others in the chain know about the end of the tax holiday too. Good communication with your solicitor can help move the process forward, helping you beat the 24 March cut-off."

The NAEA's recent figures show that the number of sales to first time buyers edged up during November and December from 19% to 21% of sales per branch.

But first time buyers still represent a low percentage of overall property sales, and data shows the number of first time buyers getting on to the housing ladder hit a three-year low in October, at just 16% of sales.

"First time buyers are key to a healthy property market," added Mrs Evans Scott.

"We hope to see the number of people completing the purchase of their first home continuing to increase through February and March, as many first time buyers are keen to purchase their first home before the tax exemption deadline.

"However, it is impossible to predict what impact the end of the tax exemption will have on first time buyers, particularly those on very tight budgets of under £250,000 for whom the one per cent tax could be disastrous."

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