Delivering his Autumn Budget, he dramatically made the announcement at the end of his speech and added that among those buying a home worth up to £500,000 in areas of high value such as London, first time buyers would not have to pay the stamp duty tax on the first £300,000 of value. The remaining £200,000 would incur the 5% charge but this could still mean a saving of up to £5,000.
Mr Hammond suggested that 95% all first-time buyers would benefit from the measures, with 80% not paying stamp duty. Estate agent Savills estimates that the average stamp duty bill for first-time buyers is around £2,700.
The changes are effective immediately but do not apply in Scotland unless the Scottish government decides to implement them.
Among other announcements, the Chancellor promised to:
- Set a target to build up to 300,000 homes per year to the mid-2020s with a budget of £44billion
- Make it easier for councils to build new homes
- Launch a review into planning permissions which have not resulted in new homes being built
- Allow local councils to charge a 100% council tax premium on empty properties
- Encourage longer tenancies within the private rented sector
Mark Hayward, Chief Executive, NAEA Propertymark said: “The announcement today from the Government to abolish stamp duty for FTBs will have a positive impact on the market. It’s a smart move to ensure the dream of homeownership for young people can become a reality and will help buyers across the UK, including London and the South East where property prices are higher.
“We do however need to realise that this move will increase the demand for FTB properties and if we don’t have the supply it will push prices up. We have seen this in areas where Help to Buy is offered, as it attracts a great deal of interest from FTBs.
“In terms of the Government’s plans to build 300,000 new homes a year, it is yet another pledge to increase the number of new homes created. While we welcome this news, we have historically had these announcements from Government to accelerate housebuilding which has not been delivered. It is not a question of ‘how many’, it’s a question of ‘how’.
David Cox, Chief Executive, ARLA Propertymark comments on today’s Autumn Budget: “There were a number of positive announcements in relation to homes for consumers in today’s Budget. We are pleased that the government will consult on longer term and more secured tenancies, this feels to be in line with the holistic approach they are taking towards the rental market. We also welcome the launch of the Homelessness Reduction Taskforce and look forward to working closely with them in the future.”
The day’s announcements followed on from the Government’s White Paper published earlier this year which set out a series of far-reaching proposals for mending the UK’s ‘broken’ housing market and addressing, in particular, the problem of undersupply.