On Monday 29th October, Chancellor Phillip Hammond delivered the 2018 budget stating Britain's housing market needs to be fixed, adding it was key to boosting UK productivity and pushing up living standards. Here we look at changes announced in the budget and what this means for first-time buyers.
At a glance:
- Stamp duty is abolished for first-time buyers of Shared Ownership homes worth up to £500,000.
- Help to Buy (HTB) scheme originally due to end in April 2021, will be extended for 2 more years.
- An extra £500m for the Housing Infrastructure fund.
Stamp Duty abolished for Shared Ownership properties
A key announcement in Chancellor Phillip Hammonds budget is the news that stamp duty will be abolished for first time buyers of Shared Ownership properties. This will apply to all Shared Ownership homes worth up to £500,000 and backdated to anyone who has bought a Shared Ownership property since last year's Budget.
Shared Ownership is a part buy, part rent scheme that allows you to buy a share in the property (usually between 25% and 75%) and pay rent on the share you don’t own. It is designed as a stepping stone to completely owning your own home, allowing you to buy further shares in your property when you can afford to.
This welcome news comes as an extension of last year's Autumn Budget, where stamp duty was abolished for first-time buyers buying a home worth up to £300,000.
Debbie Coombs, Director of Sales and Marketing at Peabody comments, “The chancellor’s announcement giving stamp duty relief to shared owners is fantastic news for first time buyers. Over the next year, more than half of our new Shared Ownership properties will fall under the stamp duty threshold. This means 380 apartments will be more accessible to hard-working Londoners.”
There are more than 200,000 Shared Ownership properties across the UK, predominantly in the capital where high house values make it difficult for first time buyers to get onto the property ladder through traditional market sales.
Help to Buy extended
A further announcement is the news the Help to Buy equity loan scheme will be extended by two years to 2023 for first-time buyers only, with new price caps set for each English region.
Help to Buy is a Government backed scheme where first time buyers can get assistance buying their first home with an equity loan of up to 40% of the property purchase price.
Chancellor Phillip Hammond commented, "The Help to Buy equity loan has achieved much higher take-up than we expected, helping 130,000 families so far with a deposit for their own home.”
Additional homes with the Housing Infrastructure Fund
An extra £500m has been promised for the Housing Infrastructure Fund that local councils can apply to for help with building homes. Mr Hammond claimed this will help to build an additional 650,000 homes to help solve the nation’s housing shortage.
In addition, a deal has also been struck with nine housing associations, to deliver a further 13,000 homes across England.
Find Shared Ownership homes with Peabody.