Chancellor pulls stamp duty rabbit from hat, says AmTrust's Bamford
23 November 2017
Below is a comment from Pad Bamford, Business Development Director at AmTrust Mortgage & Credit, on today’s announcement by the Chancellor to waive stamp duty for first-time buyers on properties up to £300k:
“The Chancellor finally did follow the pattern of his successor and pull a housing-related rabbit from the hat in this Budget, this time in the form of waiving stamp duty up to a new £300k threshold for first-time buyers. Few were expecting the threshold to be set at such a high level – far in advance of both Wales and Scotland - and this will clearly deliver a boost for first-timers meaning they won’t need to save potentially thousands of pounds in order to pay for this tax. Instead this money can go towards the deposit hopefully meaning they’ll have the necessary money in a quicker time. It’s also positive that this is applicable to those purchasing their first home up to a value of £500k.
“If the market was now able to couple this with a greater appetite from lenders to lend in the high LTV space – typically used by first-time buyers – specifically at 90-95% levels then we could well see a significant increase in first-time purchasers. Unfortunately, up until now, despite all the Government intervention this has not been the case and the actual product availability – particularly at 95% LTV and since the end of the Help to Buy 2 Scheme – is low. Therefore, even with the waiving of stamp duty, potential first-time buyers will need to save at least 10% of the value of the home, and much more, if they want to secure a mortgage and get the best rates. Lenders do have an opportunity to offer more high LTV products and greater levels of lending if they use private mortgage insurance to de-risk their activity in this market – it would also help bridge the significant gap between the cost of high and low LTV mortgages which can see those borrowers with small deposits paying much more for their mortgage each month.”
