What The Stamp Duty Cuts Mean For Wellingborough Buyers And Landlords

Cuts to stamp duty were announced in the Government’s mini-Budget, doubling the amount at which stamp duty takes hold for all home purchases, meaning the first £250,000 of a property’s price will be exempt compared to just £125,000 before.

For first-time buyers, the threshold at which stamp duty begins rises from £300,000 to £425,000, while the maximum value of a property on which first-time buyers can claim relief on was increased to £625,000 from £500,000.

Chancellor of the Exchequer, Mr Kwasi Kwarteng said: “The steps we’ve taken today mean 200,000 more people will be taken out of paying stamp duty altogether. This is a permanent cut to stamp duty, effective from today.”

• From £250,001 – £375,000 – 2%
• From £375,001 – £1,050,000 – 5%
• From £1,050,001 – £1,625,000 – 10%
• The remaining about above £1.625m – 12%

What Could This Mean For House Prices?

During the stamp duty holiday was introduced in July 2020, the number of buyers coming to the market increased dramatically, pushing house price up.

This time however, the Bank of England have increased interest rates up to 2.25%, meaning that people applying for mortgages and those moving onto variable rates will incur higher monthly payments.

So, whilst the stamp duty cut will off set much of this for buyers, giving more buyers access to the market (even if the monthly costs will likely be higher than before) affordability might be stretched.

We’ve seen in the last few months that asking prices in Wellingborough have begun to level out. With this announcement, I expect a bump in asking prices though not a huge increase as we saw during the stamp duty holiday.

What Does This Mean For Landlords?

It’s not been confirmed whether buy-to-let landlords, who will continue to pay a 3% stamp duty surcharge, will benefit from the tax cut.

The main change will be in the interest rate changes to 2.25% (if buying with a mortgage) and NatWest also upped its “stress rate” from 4.75 per cent to 5.1 per cent, meaning that landlords are required to make a yield of at least 5.1 per cent on any property underwritten by the mortgage.

Expect other lenders to follow suit.

I’m In The Process Of Buying A Property – What Does It Mean For Me?

People in the process of buying a property should benefit from the tax break as it comes into effect on Friday 23^rd September 2022. Contact your solicitor to ensure you get the discount.Cuts to stamp duty were announced in the Government’s mini-Budget, doubling the amount at which stamp duty takes hold for all home purchases, meaning the first £250,000 of a property’s price will be exempt compared to just £125,000 before.

For first-time buyers, the threshold at which stamp duty begins rises from £300,000 to £425,000, while the maximum value of a property on which first-time buyers can claim relief on was increased to £625,000 from £500,000.

Chancellor of the Exchequer, Mr Kwasi Kwarteng said: “The steps we’ve taken today mean 200,000 more people will be taken out of paying stamp duty altogether. This is a permanent cut to stamp duty, effective from today.”

• From £250,001 – £375,000 – 2%
• From £375,001 – £1,050,000 – 5%
• From £1,050,001 – £1,625,000 – 10%
• The remaining about above £1.625m – 12%

What Could This Mean For House Prices?

During the stamp duty holiday was introduced in July 2020, the number of buyers coming to the market increased dramatically, pushing house price up.

This time however, the Bank of England have increased interest rates up to 2.25%, meaning that people applying for mortgages and those moving onto variable rates will incur higher monthly payments.

So, whilst the stamp duty cut will off set much of this for buyers, giving more buyers access to the market (even if the monthly costs will likely be higher than before) affordability might be stretched.

We’ve seen in the last few months that asking prices in Wellingborough have begun to level out. With this announcement, I expect a bump in asking prices though not a huge increase as we saw during the stamp duty holiday.

What Does This Mean For Landlords?

It’s not been confirmed whether buy-to-let landlords, who will continue to pay a 3% stamp duty surcharge, will benefit from the tax cut.

The main change will be in the interest rate changes to 2.25% (if buying with a mortgage) and NatWest also upped its “stress rate” from 4.75 per cent to 5.1 per cent, meaning that landlords are required to make a yield of at least 5.1 per cent on any property underwritten by the mortgage.

Expect other lenders to follow suit.

I’m In The Process Of Buying A Property – What Does It Mean For Me?

People in the process of buying a property should benefit from the tax break as it comes into effect on Friday 23^rd September 2022. Contact your solicitor to ensure you get the discount.