The government’s recent decision to reduce stamp duty land tax (SDLT) will mean there will be an extra 200,000 homebuyers exempt from the levy.
Last week, chancellor Kwasi Kwarteng revealed plans to increase the threshold for paying SDLT from £125,000 to £250,000.
What’s more, first-time buyers will not have to pay any tax on a property worth less than £625,000.
Subsequently, thousands of people will save a considerable amount of money when purchasing their first, or next, property, helping to prevent the housing market from slowing down amid interest rate hikes.
As a result, a home-mover buying a £300,000 property will now have to pay £2,500, as opposed to £8,750, which they would have to had to find before Mr Kwarteng’s recent announcement.
Commenting on the move, chief executive officer of mortgage advice firm UK Adviser Maxim Cohen told Estate Agent Today: “There could have been a slowdown. Keeping the UK market buoyant is important to the UK economy as a whole.”
He noted that interest rates have begun to rise, while mortgage providers are offering fewer products, making it harder for homebuyers to access finance needed to move up the property ladder. Therefore, reducing SDLT will help them to afford buying a home and keep the market from stalling.
According to Halifax’s recent House Price Index, property values have continued to rise despite interest rate hikes, putting homeownership even further out of reach for many. Indeed, properties have increased by more than £30,000 in the last year alone.
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