Alastair Darling provides support for first time buyers

The Chancellor, Mr Darling, in his budget today provided some encouragement for new buyers to enter the market by removing stamp duty on the lowest priced homes for first time buyers.

In his final budget before the general election, Alastair Darling announced that he would axe stamp duty on house sales under £250,000 for first time buyers. Under the present rules, buyers of properties between £125,001 and £250,000 pay 1% stamp duty on the purchase price.

The reduction in stamp duty will be funded through the introduction of a new higher stamp duty band of 5% on properties costing more than £1 million from April next year. Owners of more substantial properties who are considering moving in the next year or two are therefore encouraged to do so during the next 12 months while the stamp duty band is still at 4% as the increase in stamp duty payment will amount to at least £10,000 on properties of this value.

Mike Rolt, Senior Title Manager, at hc solicitors, commented: “As the housing market is already showing some signs of a spring growth and recovery, any additional encouragement for buyers is very welcome. The average price paid for a house in the City of Peterborough in January 2010 was only £112,555 so this reduction could benefit many first time buyers in the area.”

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This article has been prepared for general interest and information purposes only; it does not constitute legal advice and should not be relied on as such. While all possible care has been taken in the preparation of this article, no responsibility for the accuracy and/or correctness of the information and commentary set out in the article, or for any consequences of relying on it, is assumed or accepted by the firm or the authors.