Stamp duty exemption benefits more than 16,000 so far

The stamp duty exemption for first-time buyers announced in the budget has benefited over 16,000 homebuyers in the first six weeks since it came into effect, according to the government. The exemption means that first-time buyers don’t have to pay any stamp duty on properties costing up to £300,000. First-time buyers buying properties up to £500,000 don’t have to pay stamp duty on the first £300,000. When he announced the changes in November, the Chancellor Philip Hammond said they would mean that 80% of first-time buyers would pay no stamp duty at all, whilst 95% would see a reduction in the amount they pay. The changes mean savings of up to £5,000 for first-time buyers, although Labour argues that they will drive up house prices. The government said it expects over a million first-time buyers to benefit from the stamp duty changes over the next five years. Use our stamp duty calculator to work out how much stamp duty you’ll pay. First Time Buyers in Scotland will also see an uplift in the Land and Buildings Transaction Tax threshold from £145,000 to £175,000, as announced in the recent Scottish Budget. A consultation is to be launched on policy before the new relief is introduced in 2018-19.Deposits often the biggest hurdleAlthough the stamp duty exemption helps first-time buyers reduce the cost of moving home, building up a big enough deposit to secure a mortgage often remains the biggest barrier to getting onto the property ladder. According to Nationwide Building Society, in most regions it would take a typical first-time buyer about eight years to save for a deposit. In the South-East and London it would take even longer, at nine and ten years respectively. The building society says that a 20% deposit in London is now more than £80,000 based on the average first-time buyer house price, around £30,000 higher than a decade ago. If you’re struggling to save, remember that there are government schemes available to help increase your deposit levels. The Help to Buy ISA allows first-time buyers to save an initial £1,200 followed by a maximum monthly contribution of £200. The Government then adds 25% to your savings up to a maximum bonus of £3,000. A Lifetime ISA is aimed at those aged between 18 and 40 looking to buy their first home or save for retirement. You can save £4,000 a year into a LISA, and again the Government will top up your contributions by 25%. For those who have been able to get a small deposit together, there are also government schemes available to help them buy their first property. For example, the Help to Buy Equity Loan scheme is designed for buyers of new-build property with a deposit of 5% to put down. Rather than taking out a mortgage for the remaining 95% of the property value, the government lends you 20% of the property price, or up to 40% in London. The government loan is interest-free for the first five years. You can read more about these schemes here