Almost a third of first-time buyers (31%) are unsure of whether recent stamp duty changes will benefit them when the time comes for them to get onto the housing ladder.
That’s according to new research from broker L&C Mortgages.
In the last Budget, the Chancellor Philip Hammond announced that stamp duty would be scrapped for first-time buyers when buying a home worth up to £300,000. In addition, when buying properties worth up to £500,000, no stamp duty will be charged on the first £300,000.
As a result of the changes, first-time buyers will save a maximum of £5,000 on their stamp duty bill.
The broker quizzed first-time buyers on how much they believed they would save if they bought their first property without having to pay stamp duty.
Around one in ten (13%) suggested they thought they would save over £5,000, which is impossible under the new rules, while almost two in five (40%) said they didn’t know what they would save.
It doesn’t go far enough
Despite many being unclear on exactly what the stamp duty cut would mean for them, the majority suggest the changes did not go far enough.
More than six in ten (62%) suggested stamp duty should be dropped entirely for all first-time buyers, irrespective of the purchase price.
Almost two in five (48%) argued that the value of the properties excluded from stamp duty should rise in line with house prices.
Boosting understanding
David Hollingworth, director at L&C, said more needs to be done to ensure first-time buyers understand the changes, noting that the new rules could be considered complicated by someone who has not been through the process of purchasing a property before.
He continued: “The number of first-time buyers who believe that the tax should be abolished for all those buying their first home, speaks of the need for clarity. Of course abolishing stamp duty for all would mean financial savings for many, but it also highlights the desire for a more simple and transparent system.
“Going through the steps to buy your first home can feel like a daunting and complicated undertaking – so it’s really important you seek expert advice in order to make sure you are getting the best deal, and that you are aware of all your options.”
