Although 92% of KFH clients have been positively affected since the stamp duty changes were announced in 2014, as prices grow and the average deposit required to buy a property in London hits £90,000*, buyers are being left with increasing ancillary costs and stamp duty charges.
For first time buyers, these costs are becoming more and more prohibitive, with the number of first time buyers in the UK having fallen for the first time since 2011.* Lisa MacKenzie, Regional Sales Director at KFH, discusses what changes to the Stamp Duty process might help more first time buyers enter the property market.
“The obvious answer is to remove stamp duty altogether for first time buyers, but George Osborne is unlikely to do that. The next best alternative could be for the government to change the way first time buyers pay their stamp duty. In November of 2015, the number of buyers purchasing their first property dropped by 10% from the summer months according to the NAEA, so it would make sense to ease the financial burden placed upon those looking to own their home.
“If buyers were offered the chance to pay only half of the Stamp Duty costs up front, they could then spread the remaining figure over a set number of years at a preferential interest rate. Affordability would still be tested to ensure they could cover this payment in addition to their mortgage repayments. This would ensure the government recoups its costs, but it would also provide the added bonus of making the initial transaction more affordable.”
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* Source: Halifax (January 2016)