Under the new system, which comes into force from Friday, the first £250,000 of a property’s value will be exempt from stamp duty. Buyers will pay 5% of the house value from £250,001, while the bracket between £925,001 and £1.5m will continue to be taxed at 10%. Any property worth more than this will be subject to stamp duty rates of 12%. The threshold at which first-time buyers will start paying stamp duty will rise from £300,000 to £425,000 and the maximum value of a property for which relief can be claimed by first-time buyers will also rise, from £500,000 to £625,000. Here, four people from different parts of the country explain how the changes could affect them.
The first buyer
Ellie Stevens, a local authority grants manager, delayed trading her first property purchase in the hope that a stamp duty cut would be announced and will now save £5,000. Ellie Stevens, 29, fears the stamp duty cut will make it harder for people like her to buy a home in the long term. Photo: Ellie Stevens/Guardian Community Stevens and her graphic designer partner, both 29, have been renting in Bristol for seven years and have been trying to buy a house for a year. “This cut is really good news for us personally. It’s a year’s worth of savings for me. But I think this will make it harder for people like us to buy a house in the long run. The real estate market here is already completely insane. We’ve made offers on 10 houses, always 10% over asking price, and only two have been accepted,” says Stevens. “For every property, there were at least 15 interested buyers.” During the pandemic, house prices in Bristol have soared, partly, Stevens says, because of Rishi Sunak’s temporary stamp duty holiday. “We had to offer £50,000 over the asking price to secure this place. I don’t think anyone in our chain will raise their prices as a consequence of these duty cuts, but if this offer had gone down we would have been priced out of Bristol and moved out of town due to rising mortgage rates and prices. ”
The rising family
For Chris, 36, an IT engineer at a trading firm, the stamp duty cut is “bittersweet”. Chris says the stamp duty cut is “bitter”. Photo: Phylakas Community On the one hand, Kwasi Kwarteng’s announcement confirmed Chris’ decision to upgrade his two-bedroom home in Walthamstow, north-east London, which his two young boys have begun to outgrow. “My wife and I moved here with our sons six years ago, but it’s not big enough for us now,” he says. “We discussed an extension but decided there’s no point when we can just move. So the idea was to explore it next year. We had a valuation and this is about as serious as we got. But the stamp duty cut is another reason to go ahead with it.” Chris says he’s not worried about potential house price increases as a result of the cut. “Whatever [price changes] happens in a new house, it will happen in our house. We’re not first-time buyers, so I take the market hot or cold with a pinch of salt.” However, Chris has reservations about the government’s wider economic plan. “Although [the stamp duty cut] it will benefit me, I kind of share the concerns that as a country we are borrowing a lot of money. But I guess I just have to get on with what we have to do as a family.” Archie Bland and Nimo Omer take you to the top stories and what they mean, free every weekday morning Privacy Notice: Newsletters may contain information about charities, online advertising and content sponsored by external parties. For more information, see our Privacy Policy. We use Google reCaptcha to protect our website and Google’s Privacy Policy and Terms of Service apply.
The second home buyer
Rajinder Singh, 34, a mortgage broker from Coventry, bought his first home 14 years ago and is looking to buy a second, bigger property to move into with his wife and children. He has estimated he will save £2,500 and sees the reduction in stamp duty as “positive”, although he was hoping for something more akin to Rishi Sunak’s stamp duty holiday in July 2020. Rajinder Singh believes the move is aimed at first-time buyers. Photo: Phylakas Community “I will see a small reduction in my stamp duty, but not as much as I might have hoped based on what happened immediately after the first lockdown. Under the changes the previous chancellor implemented I would have saved significantly more, so I believe these reductions are aimed more at first-time buyers. “I’m lucky in the sense that I don’t have to sell my property – it will be let through a rent-to-own mortgage. I can buy the next one using some of the equity in the one I have.” Singh does not believe house prices will rise after the stamp duty cut in the same way they did in 2020, despite recent warnings from analysts. “This reduction in stamp duty came at a time when we were just coming out of lockdown, when there was a lot of frustration and people were saving money. It was just the perfect cocktail for there to be a massive spike in property prices. I don’t think this will have the same effect.”
Salesman
Robert Hughes, a retired civil servant, has been trying to sell his Lincolnshire home for a while and is hoping that stamp duty cuts will help breathe some life into a sluggish housing market in his area. “Our house has been on the market for a few weeks, we lost a buyer because the chain collapsed. We would like to get closer to our children. Judging by sites such as Rightmove it is clear that fewer properties are coming on the market in this area and that properties remain unsold for much longer. Many sellers have been cutting their prices here lately as higher interest rates and rising inflation curb the appetite for large individual investments. “I think today’s stamp duty cuts are about right and will boost the housing market, while other pressures such as interest rates and inflation would put a damper on house price growth – although in the longer term house prices could well rise. due to this reduction. It’s a crystal ball situation. It is also true that many people can now spend their savings on home improvements, stimulating the economy. Overall, I think this is a good thing that will provide a much-needed short-term economic boost.”
