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First time buyers save £284 million since stamp duty was abolished

Since stamp duty was abolished for first time buyers with homes valued under £300,000 total savings have amounted to £284 million.

Data released from the government shows 121,500 first time buyers have saved £284 million since stamp duty land tax (SDLT) was abolished for properties worth £300,000 or under.

The changes to stamp duty were introduced in November 2017 by Chancellor Philip Hammond for home costing up to £500,000 where the first £300,000 of the purchase price will not be subject to tax.

First time buyers can save up to £5,000 by not paying stamp duty at all and to date the average savings for home buyers has been £2,337.

Savings made by home buyers

The average house price in England for a first time buyer was £204,140 in May 2018 according to the Office of National Statistics (ONS) with no stamp duty to pay, saving £1,582 in costs.

This is in contrast to buy-to-let investors with recent changes to stamp duty increasing the cost of this tax and making it less attractive to buy.

For home movers is England the average price of a home is £276,751 and with no relief they pay the full stamp duty cost of £3,837.

The following table shows the amount first time buyers pay in stamp duty before and after the changes from 22 November 2017.
Property value Before Budget After Budget
£200,000 £1,500 £0
£208,000 £1,660 £0
£300,000 £5,000 £0
£400,000 £10,000 £5,500
£410,000 £10,500 £5,500
£500,000 £15,000 £10,000
In London the average house price is higher at £418,735 and home buyers pay £5,936 in stamp duty compared with £10,936 under the previous system.

For home movers in the capital the average price paid for a property is £540,622 and the stamp duty cost was an eye watering £17,031 which may encourage many to stay where they are as remortgage buyers.

To avoid stamp duty older homeowners may decide not to downsize and instead the equity release buyer can access wealth using a lifetime mortgage to improve your quality of life or pay university fees for grandchildren.

Commitment to affordable homes

The government has a long-term commitment to making homes more affordable and as part of the Autumn Budget the Chancellor announced at least £44 billion for housing.

This includes at least £15.3 billion of financial support building 300,000 new homes a year in key areas over the next five years.

In addition the government is encouraging better use of land in cities and towns and retains the Help to Buy scheme for equity loan and Help to Buy ISA to support first time buyers.

Despite these efforts the average single first time buyer needs 10 and a half years to save a 15% deposit in England & Wales according to Aneisha Beveridge Analyst at Hamptons International.

If you are a single home buyer and started saving in quarter one 2018 you would not be able to purchase a home until the autumn of 2028 and in London it would take until 2035.

For a couple they could set up home by the spring of 2023 as they share the household costs and with slower house price growth in the capital, they can now save six months quicker and buy in 2026.

What are your next steps?

Call our LCM mortgage brokers for advice if you are a first time buyer, want to remortgage your existing home for the best mortgage deal, moving home or a buy-to-let investor.

For equity release buyers our London City Mortgage advisers can recommend lifetime mortgages allowing you to receive cash from your property to buy a more expensive home or help your children start or expand a business.

Start with a free mortgage quote or call us and we can take your details. Learn more by using the property value tracker chart, mortgage costs calculator and equity release calculator.

Use your dashboard to access online mortgage quotes, money off vouchers and start your mortgage application online 24/7 on desktop, tablet or smartphone

Mortgage Best Buys

These are examples of mortgage products we can approach with many more offering interest rates and flexibility to meet your needs.

1.16% Fixed Rate
60% Loan to Value
£1,525 App Fee
Until 01/11/2022
Reverts to 4.09%
1.18% Fixed Rate
60% Loan to Value
£1,034 App Fee
Until 31/10/2022
Reverts to 3.59%
1.17% Fixed Rate
60% Loan to Value
£1,025 App Fee
Until 31/09/2022
Reverts to 3.59%
1.19% Fixed Rate
60% Loan to Value
£999 App Fee
2-Years Time
Reverts to 3.59%

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    Equity Release may involve a Lifetime Mortgage or a Home Reversion Scheme. To understand the features and risks, please ask for a personalised illustration. Equity Release may affect your entitlement to means tested state benefits and will impact on the size of your estate. For Equity Release London City Mortgages charge a fixed fee upon completion of £695. For Mortgages a fixed fee is charged on application. Typically this is from £295 up to £495 for the services selected.


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