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Official Government statistics have revealed that since stamp duty was cut for first-time buyers (FTBs) in November's Autumn Budget, 69,000 households have taken advantage of this relief. The total amount relieved between November and the end of March is estimated at £159 million.
Almost half (49%) of the total amount came from London and the South East, where 19% and 13% of the transactions took place, respectively. On average, first-time buyers have been £2,300 better off since stamp duty was cut, with those in London having to pay £4,300 less than before, while those in Northern Ireland have only saved £800.
The stamp duty cut works as such: anyone who has never owned a property before, and who intends to buy a home with the purpose of living in it themselves, will not have to pay stamp duty on properties worth up to £300,000. Those who are looking to buy a first property worth up to £500,000 (which could easily be the case in or near London) won't have to pay stamp duty on the first £300,000 and only 5% on the remainder of the property's worth.
HMRC's Quarterly Stamp Duty Statistics show that the majority of FTB transactions were for homes worth less than £300,000, at 54,600. The figures are in line with expectations, with further estimations predicting that over 1 million people will be able to get onto the property ladder with the policy's help over the next five years.
"Prior to the Government announcing plans to abolish stamp duty, our research revealed that 30% of prospective first-time buyers would accelerate their plans to buy a home if it was temporarily reduced," commented Charles McDowell of Aldermore. However, he pointed out that more affordable homes still need to be built so that people can actually take advantage of the cut.
Looking at the wider market, the quarterly figures show that residential transactions fell by 21% to 238,200 compared to the last three months of 2017, which marks the largest quarterly fall since 2014-15. This indicates that there were more than seasonal differences at play, despite an increase of 10% in the number of transactions that were not liable for stamp duty tax.
With uncertainty in the direction of house prices and the Bank of England base rate, it might not be that surprising to find that people were reluctant to buy or sell their home at the start of 2018. Those that are now looking to buy should certainly try to make sure they get the best deal for them, and that includes finding a top-notch mortgage.
Have a look at the best first-time buyer mortgages to see if you can take advantage of the stamp duty cut
For current homeowners or those with a bigger deposit, there are the best overall mortgage deals to consult
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