First time buyers are getting some much-needed relief during the pandemic because they can take advantage of the government’s stamp duty holiday. Until 31 March 2021, they can get government support to pay a few thousands of pounds less when buying a home for the first time. For properties priced under £500,000, it is also possible to save a lot of money in taxes. In addition, the Help to Buy scheme will help new buyers until 2023. In London, new home buyers can put down an initial 5% deposit for properties under £500,000. This means that the minimum deposit is £25,000 and first-time home buyers don’t have to pay any tax on their home purchase.
Stamp Duty Holiday Breathing Life Into The Property Market
The stamp duty holiday is designed to prop up the real estate industry due to the fallout of the coronavirus outbreak. However, it doesn’t mean that first-time home buyers have a lot of time. It takes an average of 120 days to conclude a housing transaction. So, there’s not much time left before the holiday expires. If they delay too long, they won’t get financial benefits when buying properties under £500,000. According to the Halifax House Price Index, the average values of properties in the United Kingdom rose about 4% after the introduction of the stamp duty holiday. The prices are still rising, despite the challenging economic situation. It is recommended for first-time home buyers to purchase homes sooner, because the higher prices can diminish the stamp duty holiday.
Compared to the same month in 2019, housing prices in October 2020 were 7.5% higher. Higher housing prices are great for sellers, but they are setting first-time buyers back, even after the stamp duty holiday was implemented. When the holiday expires in March 2021, the prices could remain high and this could cause reductions in demand in the real estate market. Many people have asked whether the UK government will extend the stamp duty holiday to continue supporting the real estate market.
Contact RWB Wealth
To learn more ways that the new the stamp duty holiday is affecting first time home buyers in the South Wales property market, contact RWB Wealth today and speak with a mortgage expert who can answer any questions you might have.
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