On 22nd November 2017, Chancellor of the Exchequer, Philip Hammond, delivered his Autumn budget. The headlining announcement was a restructuring of stamp duty charges, designed to encourage first-time buyers. Here we take a look at the impact this might have on houses for sale in Swindon.
Stamp duty is a lump-sum tax that anyone buying a property or land costing more than a set amount has to pay. First-time home buyers will now not have to pay stamp duty on the first £300,000 of any home costing up to £500,000. If they buy a first home costing more than £500,000, they won’t benefit from any change and will be buying under the standard system.
There are certain conditions which need to be met in order to reap the benefit. You won’t be eligible, for instance, if you’re a first-time buyer jointly purchasing a home with a non-first-time buyer. You both need to be first-time buyers.
The Treasury estimates the move will take 80% of first-time buyers out of paying stamp duty altogether. But what are the actual savings on houses for sale in Swindon?
Most of the houses for sale in Swindon over the past year were terraced properties, which on average sold for £191,298. Under the new rules, a first-time buyer would save £1325.96 on stamp duty buying this type of property.
Semi-detached properties had an average sold price of £236,366 (which would now attract a saving of £2,227.32 on stamp duty).
Detached properties averaged at £329,231 (the saving on duty for this priced property, £5000). The maximum stamp duty saving that you can make under the new system, in fact, compared with standard rates, is £5,000 if buying a property costing between £300,000 and £500,000.
It’s been predicted by some housing market experts that house sellers will negotiate harder and force property prices higher, knowing first-time buyers will no longer have to factor stamp duty into their costs. Demand in areas where first-time buyer properties are already scarce would also force house prices upwards. Meaning that some first-time buyers will no longer have stamp duty to pay but have to buy at a higher price.
In terms of ease of selling, sellers of typical first-time buyer homes may benefit from a wider choice of buyers. But property down-sizers, people higher up the housing market chain, might still struggle to move, having to pay the usual stamp duty rates.