Previously, buyers do not pay tax on the first £125,000 of a property purchase. However, in a popular move with younger voters, stamp duty for first-time buyers has been cut. In a more controversial move, the Help to Buy scheme has also been extended. How will this affect the property market?
Stamp duty to be abolished
Hammond confirmed the popular prediction that stamp duty would be cut for first-time buyers in this Budget. From 22 November, first-time buyers of homes worth under £300,000 will not pay any stamp duty.
Additionally, first-time buyers of homes worth more, between £300,000 and £500,000, will not pay stamp duty on the first £300,000. Instead, they will pay the normal rates of stamp duty on the price above that – saving the average buyer £1,660. According to the government, 95% of first-time buyers who pay stamp duty will benefit.
However, there is speculation from the OBR that the cuts in stamp duty could result in higher house prices. How will this affect the property market in the years to come?
Build 300,000 homes a year by the mid-2020s
Another aim of the government is to build 300,000 new homes a year, investing £44bn in capital loans and funding guarantees to support the housing market. This rate has not been achieved since 1970. Help to Buy has also received a £10bn extension.
Although the rate of economic growth is slowing, by setting out these initiatives in the Autumn Budget, Hammond was clear in his statement on his vision for the younger generations: to make “the dream of home ownership is a reality”.
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