April 15, 2024

Illuzzi Letter

Envisioning And Creating Your Dream Home

The Budget 2008 Brings No Good News For First Time Buyers

Yesterday’s budget brought no real rest bite for first time buyers as the Mr Darling announced that the stamp duty threshold will unfortunately remain the same. People who are buying into shared equity schemes will have the option not to pay stamp duty until they’ve built up to the final 20 per cent of the property. As you can imagine this will benefit very few people.

This means first time buyers must continue struggling to get on the property ladder. To be honest I’m disappointed that the Chancellor has taken the decision not to raise the stamp duty threshold, particularly in light of the struggle first time buyers have in trying to get on to the property ladder. This is the second year that the threshold has remained the same, yet house prices have continued to rise during this period.

First time buyers are the future of the UK housing market. The stamp duty threshold of £125,000 is 25 per cent below the average house price for the first time buyer which stands at around £167,000 today. It is also highly likely that many first time buyers, especially in London and the South East of the UK, where the average first time buyers pay up to £261,000, will continue to face the additional financial strain of stamp duty.

According to the CML (Council of Mortgage Lenders) 61 per cent of first time buyers paid stamp duty in January 2008 – a 30 per cent increase in 2 years. No wonder Mr Darling has chosen to ignore the issue yet again!