New research from L&C Mortgages has revealed the lack of understanding amongst first-time-buyers surrounding recent cuts in stamp duty – with 31% unaware if they will benefit or not when they buy their first home.
According to the data, 22% have not changed their minds on the price of the house they want to buy, in light of these stamp duty changes because they do not know the impact the new rules will have on their potential property.
When asked how much first-time buyers thought they would save if they bought their first home without having to pay stamp duty, the lack of education around the benefits of stamp duty relief were highlighted again, with 13% stating that they thought they would save over £5,000 – which is impossible under the new rules. On top of this, 38% said that they didn’t know how much they would save if they bought their first home now.
The majority of English first-time buyers believe that the recent stamp duty cuts by the government did not go far enough – with 62% believing that stamp duty should be abolished for all first-time buyers. 38% think the value of the properties excluded from stamp duty should rise in line with house prices, highlighting further the belief that the current measures won’t go far enough, and will need to be kept under close review.
52% think they will benefit from the stamp duty abolition when they buy their first home. Of those aiming to buy a property priced between £125,000 and £500,000, 42% either thought that stamp duty relief would not benefit them, or didn’t know if it would – demonstrating a further lack of knowledge about the new rules.
L&C’s David Hollingworth commented: “More needs to be done in order to ensure that first-time buyers know what is available to them. The stamp duty relief is welcomed by many who are looking to buy their first home, but the new rules could be considered complicated to someone who hasn’t been through the process of purchasing property before. In fact, the lack of understanding uncovered through our research could mean that some first-time buyers think that owning their own home is one step further away than it actually is – when in reality, a saving of up to £5,000 could be the difference in getting the required deposit together, or dropping to a lower LTV bracket.
The number of first-time buyers who believe that the tax should be abolished for all those buying their first home, speaks of the need for clarity. Of course abolishing stamp duty for all would mean financial savings for many, but it also highlights the desire for a more simple and transparent system. Going through the steps to buy your first home can feel like a daunting and complicated undertaking – so it’s really important you seek expert advice in order to make sure you are getting the best deal, and that you are aware of all your options.”