Stamp duty holiday saves first time buyers £319 million

Tuesday 14th February 2012

First time buyers have saved an estimated £319 million as a result of the stamp duty holiday which came into play in March 2010, according to new analysis from Santander Mortgages.

The two year exemption, which comes to an end on 24th March this year, offers first time buyers savings of up to £2,500 and is estimated to have benefited roughly 170,000 new home owners.

Santander Mortgages is urging first time buyers to act fast if they still wish to take advantage of the tax holiday, after which first time home owners can expect to pay 1 per cent tax on property purchases between £125,000 and £250,000 and a 3 per cent on purchases over £250,000.

Getting a foot on the ladder is tough task for first time buyers against the backdrop of a sluggish property market,” said Phil Cliff, director of Santander Mortgages.

“Despite the availability of some very affordable mortgage deals, that extra £2,500 can make a huge difference to a financially stretched first time home buyer.

"The end of the stamp duty tax holiday is looming so we're urging new buyers who are in the process of purchasing a home or even those hoping to do so in the immediate future to act fast and make sure all parties, including solicitors and sellers are well aware of the deadline."

In a separate piece of research from HSBC, 90% first-time buyers have not paid stamp duty since start of holiday. Between 24th March 2010 and the end of 2011, 159,872 first-time buyers benefited from the stamp duty holiday by buying their first home priced between £125-250,000.

HSBC says this is half (50%) of all of those first-time buyers who bought a home over the past two years who would otherwise have been liable to pay the additional tax.

The chief economist for the Council of Mortgage Lenders (CML) Bob Pannell commented: "The CML expects first-time buyer transactions to pick up as the concession end date looms nearer.

“For those who miss the deadline, the credit constrained environment we find ourselves in means first-time buyers will increasingly have to fund stamp duty from their back pockets so the end of the concession will have a real impact."

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