First time buyers and estate agents this week welcomed the abolition of stamp duty on homes sold to first time buyers but warned it needs to be ‘deployed alongside other measures’ to boost the local market.
Chancellor Philip Hammond announced in his Budget [Wednesday November 22] that the tax will be immediately abolished for all properties up to £300,000 bought by first time buyers.
Robert Jacobs, head of residential sales at Tunbridge Wells estate agents Savills, said: “Any boost for those trying to get onto the property ladder has to be a good thing.
“For those looking to buy their first home for £300,000, the previous stamp duty rate would have been £5,000. So if you are saving for a 10 per cent deposit to secure a mortgage, £5,000 off £30,000 is a significant amount.” Benefits to first time buyers do not stop there.
Those spending up to £500,000 will also benefit as the first £300,000 of the price will not be subjected to tax. The move is predicted to save the average first time buyer £1,660, and will cost the Treasury an estimated £3.2billion over the next five years.
Previously the tax was paid on all purchases above £125,000. Mark Sparrow, sales manager at Wood & Pilcher in the High Street, Tunbridge Wells, said: “It would be churlish not to welcome the abolition.
“It is to be encouraged, but the only way it will work in the long term if it is deployed alongside other measures, such as more house building, as there is not enough housing and flats in Tunbridge Wells.
Most young people want to live near the town centre.” Commuters Mr Sparrow said 20 per cent of the properties on the estate agent’s books cost less than £300,000.
These are typically one-bedroom apartments costing under £200k, two-bed apartments which cost up to £250k and red brick Victorian houses which can cost up to £300,000.
He added: “First time buyers are almost always people who earn their money in London and choose to live in Tunbridge Wells, usually in their mid-20s.
“People have still got to save money, but this saving can pay for legal bills and it is a significant amount.”
The Office of Budget Responsibility (OBR) has warned the move could drive house prices up and leave current home owners as the real beneficiaries. Mr Sparrow commented: “That is a possibility and has happened in the past, but that is not the nature of these things now.”
Simon Spare, director of Thompson Spare estate agents also in High Street, Tunbridge Wells, said: “In the short term it will help the housing market which has seized up a lot due to the perceived weak Government and uncertainty around Brexit.
“Prices are starting to stagnate, and there is a lot of downward pressure and we are suffering because of it.However, the move is more ambiguous than at first glance. This might help sellers and affect the market in different ways.”
Potential first time buyer Jacob Tassaker, 28, is hoping to find a home with partner Scarlett Attwood, 26 (pictured), and leave their current rented property in Rusthall.
The business development manager is negotiating a move to a three-bedroom cottage in Wadhurst and said the stamp duty abolition could save the pair around £5,000.
“We had a feeling there might be potential for this in the budget so held out paying any sort of solicitor fee. But you can’t get much for your money under £300k in Tunbridge Wells.
“We started looking at Wadhurst because it needed to be somewhere with a station but also near to Tunbridge Wells that was less expensive. It was quite a long process of looking.
“It is still difficult but this has definitely made things easier. I don’t know how it will affect the economy but I am happy because I benefit from it.”