23 November 2017
On 22nd November it was announced that Stamp Duty is to be abolished for for all first-time buyers purchasing property of a value of £300,000 or less.
If you are a first-time buyer, we’re here to clarify the details of the changes and explain what it means for you.
What are the Stamp Duty changes?
From immediate effect, stamp duty will be removed for all first-time buyers purchasing property for £300,000 or less. What’s more for first-time buyers purchasing property priced up to £500,000 they will only pay stamp duty on the difference.
From 22nd November 2017 the new stamp duty bands and rates will be as follows:
Band Rate
First-time buyers less than £300k 0%
First-time buyers less than £500k 5% on proportion above £300,000
First-time buyers more than £500k follow existing rates
What does the stamp duty change mean for the housing market?
The chancellor made a bold move to reduce stamp duty for all first-time buyers. Raising the threshold for SDLT to £300k for all first-time buyers forever will lift 80% of first time buyers out of the tax. To account for higher prices in some parts of the country, all first-time buyers buying property up to £500k will benefit from the £300k exemption. That means that 95% of first time buyers will benefit from the change.
As property prices have risen, an increasing number of first-time buyers are now paying Stamp Duty, indeed 80% paid Stamp Duty in 2017, compared to just 49% in 2007. This news will remove one of the hurdles facing first-time buyers and more movement in this end of the market is expected as a result.
What does the Stamp Duty change mean for you?
If you are a first-time buyer the chart below shows how much first-time buyers in different areas of the country could benefit.
Impact on stamp duty for first-time buyers by location
To talk about the stamp duty changes or to get advice on a property you are looking to purchase, please contact one of the team on 01904 652729 or info@citylets.co.uk
22 November 2017
“The Chancellor’s Budget brought some very welcome help for the housing market today. Reducing stamp duty for first-time buyers will help many start their housing journey and boost activity. And the extra money to get housebuilding numbers up should help to relieve some pressure in the areas of highest housing demand. But there are still things to do.
Stamp duty is a significant hurdle for all buyers, not just first -time buyers. It is activity amongst movers that is most critical to the growth of transactions in the wider housing market. While first time buyers face affordability issues, so do movers and without making it easier for these second steppers to move on the supply of property to buy will always be limited, adding more to price pressures.
And it is no longer realistic to look at the housing market with a focus on home ownership alone. The rented sector is, and will continue to be, a hugely important part of the provision of housing in this country. The UK housing market needs a co-ordinated tenure neutral approach to addressing the problems in the market which recognises the changes in tenure choices already taking place.”
Alison Platt, Countrywide Group Chief Executive Officer
13 November 2017
Cash landlords spend a record £21 billion
A record 65% of landlord purchases over the last 12 months were made by cash buyers, which is a 6% increase on the previous year (2016) and a 25% increase to 10 years ago in 2007. When split down by region, you will see from the table below the highest number of cash purchases took place in the North East, Scotland and the North West, with Yorkshire coming 5th in the table. Noticeably London was at the bottom of the table with only 42% of investors purchasing with cash, versus 66% (a 24% increase) purchasing investment properties with cash in Yorkshire, and a whopping 78% of investors in the North East buying in this way.
In October rents grew by 0.5% year-on-year across the UK, driven by the steepest rises in the Midlands and Wales, which rose by 2.2% and 2.6% respectively. Whilst Yorkshire didn’t see such a dramatic rise in rents, the region was still able to show a prosperous market with the 4th highest increase in average rental income of 1% over the past 12 months, against the decline recorded in London of 0.9% – see below.
Cash Buyers
The rising number of landlords buying in cash means that over the last year they spent more than at any time in the last decade. Over the last 12 months landlords buying in cash bought £21.0 billion worth of homes which is £0.2 billion more than in 2016 and a 32% increase on 2007 when they spent £15.9 billion (chart 1 table 1). Much of this cash has come from landlords remortgaging to take equity out of homes they already own.
The proportion of landlords buying in cash has steadily increased over the last two years. Over the last 12 months 65% of all homes bought by a landlord were paid for in cash, surpassing the previous high of 60% set in 2011 (table 1). This is the highest figure since Countrywide’s records began in 2007, a year when 60% of buy-to-let purchases were paid for with a mortgage (table 1).
Landlords buying in Northern England and Scotland are most likely to buy in cash. Seventy-eight per cent of privately rented homes bought in the North East over the last 12 months were paid for in cash, with cash landlords spending £3.17 for every £1 spent by a landlord using a mortgage (table 2). Landlords buying in London are the most likely to use a mortgage. London is the only region where mortgaged landlords outspent their cash backed counterparts – £1 for every 67p.
Rental Growth
The annual rate of rental growth slowed between September and October with the cost of the average new let in Great Britain rising 0.5% over the last year to reach £958 per month (table 3). Excluding London however, where rental growth dipped back into negative territory, rents rose 1.2% over the last 12 months.
Commenting Johnny Morris, Research Director at Countrywide, said:
“Landlords have increased their housing wealth considerably over the last 10 years. This means cash purchases are steadily becoming a bigger part of the market. But a landlord buying with cash will often have a mortgage either on their personal home or other properties in their portfolio. Rising prices have allowed landlords to take equity out of both their personal or other rental homes to expand their portfolios.
“Rental growth across Northern England has slowed under pressure from record numbers of new landlords. But it’s a different story across the Midlands and parts of the South where rents are once again nudging upwards. It looks like the last effects of the investor stamp duty surcharge have finally worked their way through the system.”
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10 November 2017
Countrywide’s leading surveying and conveyancing businesses are proud to be recognised with prestigious industry awards. Countrywide Conveyancing Services has been named ‘Best Conveyancer’ alongside Countrywide Surveying Services winning the top award for ‘Customer Service/Treating Customers Fairly – Non Lenders’ at the Mortgage Finance Gazette Awards 2018.
The awards were judged by a panel of industry experts who chose the winners and the presentation was held on 14 November at the Royal College of Physicians in London. Countrywide fought off strong competition to pick up the accolades, Countrywide Surveying Services were also Highly Commended in the ‘Best Use of Collaborative Technology’ and ‘Innovation – Non-Lenders’ categories, as well as Countrywide Conveyancing Services in ‘Customer Service/Treating Customers Fairly – Non Lenders’.
Commenting on the award wins, Paul Wareham, Managing Director of Countrywide Surveying and Conveyancing Services, said: “I’m delighted with the recent award wins across our Surveying and Conveyancing businesses. Our customers are at the heart of our business and we are passionate about the service we deliver to them. We have developed key commitments, which outline the standards of service that customers can expect, including reassurance that treating customers fairly is core to every decision at every stage of their dealings with us.”
Paul Chapman, Business to Business Managing Director added, “We will continue to do what we do best; driving innovation through investment in our technologies and processes, in order to set the standard for industry best practice and deliver excellent services to our customers. ”
Countrywide would like to thank everyone who voted for them.
