Stamp Duty Holiday Finishes

On the 24th March 2012, the two year long stamp duty holiday drew to a close. During this period of time, properties valued between £125,000 and £250,000 were exempt from the 1% tax. This ‘discount’ was ordered by the government in order to boost the property market.

First time buyers eligible for this had the chance to save up to £2500 on tax. As the government had hoped there was a rise in property purchases, particularly during the last few months of the holiday.

The Council of Mortgage Lenders found that the number of buyers in January 2012, compared to January 2011, increased by almost 25%. They also revealed that 13,200 loans worth £1.6billion were approved.

With such encouraging results, the National Association of Estate Agents and The Council of Mortgage Lenders were hoping the Budget announcement for 2012 would include an extension on the stamp duty holiday. However George Osborne, Chancellor of the Exchequer did not. It is believed this is partly because of the government’s newest scheme to improve the housing market.

The NewBuy Scheme has been created in order to, not only increase the number of first time buyers owning the first home, but to also boost the number of jobs available for house builders. This scheme entitles first time buyers to a 95% mortgage on a newly built property, thus giving them only a 5% deposit to pay.

In recent years it has mainly been landlords who have been profiting in the property market, being easily able to cover the costs of a mortgage, property advertising and landlords insurance with the high rental yields available, but the government are now hoping that the market for first time buyers will improve.