This article will provide a general overview on how the changes to stamp duty land tax (SDLT) might influence real estate agents, cash house buyers and other property related sectors but we’ll focus on the how the changes to (SDLT) will affect first time buyers.

1. How 2017's Stamp Duty Cut's
affect the UK Property
Market
On the 22nd of November 2017, Chancellor of the Exchequer, Philip Hammond presented
his first Autumn budget to parliament. The budget covers a range of different areas
including housing, stamp duty, pensions, tax avoidance and much more.
This article will provide a general overview on how the changes to stamp duty land tax
(SDLT) might influence real estate agents, cash house buyers and other property related
sectors but we'll focus on the how the changes to (SDLT) will affect first time buyers.

3. As you can tell there a number of pro’s & con’s to the said change in stamp duty. Let’s look
at these a little closer.
Pro's to the stamp duty cut
1. Homes under £300,000 will pay no stamp duty: Pretty simple really, the cut
allows first time buyers to save more money which means they will have more cash
available for their deposit.
2. Homes between £300 - 500,000 will pay only 5% stamp duty: If you can
afford a property in this price bracket then money is probably not much of an issue.
You still end up paying less tax duty because of the changes to stamp duty that
occurred in April 2016.
3. The stamp duty cut will free up extra cash for first time buyers: As
mentioned earlier the cut in stamp duty will allow first time buyers to save money.
This is especially useful for buyers on low incomes & smaller deposits.
4. The increase in cash will allow first time buyers to get on the property
ladder a little easier: Again, more money equals more savings so it's easier for
people to buy.
Con's to the stamp duty cut
1. An influx of buyers will lead to increased property prices in the long
run: If more people are buying homes, there is a high possibility that over time
property prices may increase.
2. More buyers also means the core issue of not enough homes being built
in the UK will further increase property prices: Everyone involved in
Britain's property sector is well aware of the long standing issue which is not enough
homes are being built in the UK. If there are more buyers it will only continue to
shoot up property inflation.
3. The savings made on stamp duty will eventually be added onto property
prices resulting in no savings at all: If property prices do increase, the savings
first time home buyers will make from the cut will be useless as they are paying more
for the property itself!
4. Home owners could start to exploit the supply & demand of houses in
the UK & begin to charge more for their homes: Homeowners notice trends
& so do estate agents. If the number of buyers increase & property prices go up, any
decent estate agent would recommend to their clients that they increase the price of
their home as the market is busy and they can get more for it.
So there you have it - the pro's & con's for the stamp duty cut! But what do some of our
industry experts think about the budget in general and the change in stamp duty?
One things for certain, the current mood within Britain's housing market is not one of
optimism.
In fact, according to the Telegraph, the chief executive of the National Housing Federation,
David Orr believes Hammond's budget has failed to deliver the 'bold' changes that are
required to help rejuvenate and fix Britain's housing crisis.
To summarize, according to Orr, the key points mentioned in the budget are a step in the
right direction which combined may see help see a small growth but in his own words:

4. “None of it is bold enough”
Previous change to stamp duty
In April 2016 there was a change in stamp duty land tax. These changes however only really
affected landlords who purchase buy-to-let or additional properties. Another change in
stamp duty so soon came as a bit of a surprise to some.
Property experts & politicians alike suggest the change in stamp duty was aimed at the
younger generation in the hope of winning back their votes from Labour and making their
dream of being able to purchase a home a little more realistic.
Affects of the stamp duty cut
The stand out point to the change in SDLT is “abolishing stamp duty land tax on
homes under £300,000 for first-time buyers” but does it come with any
consequences?
At first glance it looks like a nice and easy way to help first time buyers get on the property
ladder and we're positive it will help – but not so much in the long run.
After a while there is a very high possibility that the extra savings people make on the
stamp duty cut will be made void by property inflation. This is due to the on going & long
term problem Britain's housing market is currently facing – There are simply not enough
new homes being built!
We believe the cut in stamp duty & the budget overall are a step in the right direction,
however, more needs to be done in order to lift Britain out of it's housing crisis.
The bottom line is:
Not enough UK houses are being built so the supply & demand for homes is always
fluctuating resulting in a very unbalanced market.
We'd love to hear your opinions! If you enjoyed our article visit our home owners advice
center for more of the same. If have any questions or would like to give us some feedback,
feel free to contact us at any time
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