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First-time buyers save millions since stamp duty cut

Tuesday 31 July 2018

Official figures released by the Government today show that stamp duty cuts have helped thousands of first-time buyers in England to save millions.

In November 2017, the Chancellor introduced first-time buyer stamp duty relief in an effort to help more young people onto the housing ladder - with homes worth less than £300,000 exempt from the tax.

Now, according to HM Revenue & Customs’ quarterly stamp duty land tax statistics, 121,500 first-time buyers have saved a total of £284,000,000 since the Government’s cut to stamp duty, which analysis by Savills says equates to around £2,385 per buyer.

However, the reduction has been criticised by some for having a minimal impact on housing sales, and last week, the Treasury Select Committee called for the abolition of the Lifetime ISA, introduced to help first-time buyers and pension savers, citing a lack of popularity.

But Financial Secretary to the Treasury, Mel Stride MP believes the figures show a commitment by the Government to continue to help first-time buyers onto the housing ladder. Commenting on the figures, Mel said: “Once again, we can see that our cut to stamp duty for first-time buyers is helping to make the dream of home ownership a reality for a new generation – exactly as we intended. In addition, we’re building more homes in the right areas, and have introduced generous schemes such as the Lifetime ISA and Help to Buy.”

In September 2017, NAEA Propertymark called for the Government to exempt first-time buyers from paying stamp duty, in order to encourage more people into home ownership, following month on month falls in sales to first-time buyers.

Speaking at the time, Mark Hayward, NAEA Propertymark Chief Executive commented: “The announcement to abolish stamp duty for first-time buyers 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 first-time buyer 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.”

The report, which is part of a much wider long-term commitment to make housing more affordable, has forecast that over the next five years the policy will help over one million people to get onto the housing ladder.

As part of the Autumn Budget housing package, the Chancellor announced at least £44 billion for housing - which includes at least £15.3 billion of financial support for house building over the next five years – and an aim to build 300,000 new homes a year in the areas that need it, as well as encouraging better use of land in cities and towns.