A year after its introduction, the First Time Buyers Relief has benefited 180,500 homebuyers.
Despite over 180,000 home buyers saving roughly £426m through First Time Buyers Relief, the “overall stamp duty receipts went up” following the second quarter of 2018. This suggests that “wealthier home buyers are paying more”.
The third quarter saw the Government earn £3.2bn from stamp duty, which was a 14% increase from the second quarter. This is largely down to a 13% increase in the number of transactions over Q3. However, when compared to this time last year, take from stamp duty is down 8%, which reflects pressures currently faced by the housing market.
The 2018 Autumn Budget extended the relief to first time buyers “buying through approved shared ownership schemes who choose to pay Stamp Duty Land Tax (SDLT) in stages” instead of on the full market value of the house. The relief was then “retrospectively applied” to eligible property purchases since November 2017.
Mel Strike MP, financial secretary to the Treasury, said: “Without this investment, more than 180,500 new homeowners may have struggled to get onto the property ladder. Maintaining the status quo was not an option.”
“FTBR is a SDLT relief for eligible first time buyers. The tax relief can be used when buying a residential property where the purchase price is no more than £500,000 in England and Northern Ireland, as long as the purchaser does not own any other properties and intends to use it as their main residence. The relief was claimed in more than 58,800 transactions between July and September this year, an increase of 12% compared to the previous quarter.”
Laura Suter, personal finance analyst at AJ Bell, emphasized how much the relief had saved home buyers since its introduction. “The average first-time buyer saved £2,360 in a stamp duty, with almost 80% of first-time buyers in the past quarter paying no stamp duty, and a fifth of all property buyers claiming the relief.”
By combining the stamp duty relief with the “£1,000 a year Government bonus from the Lifetime ISA and other initiative such as Help to Buy”, first time buyers are able to get on the property ladder much sooner.
However, Kevin Roberts, director of the Legal &General Mortgage Club, commented on the fact that the stamp duty remains a “financial barrier to those higher up the housing ladder”, especially for families who are wanting to purchase a larger property, or ‘last time buyers’ wanting to downsize.
Roberts said: “The changes in the Chancellor’s recent Budget were certainly welcome, with stamp duty relief extended to shared ownership properties. However, if we are to create a housing market that is accessible to all, we must do more for older homeowners by extending the stamp duty exemption.”