"Those who are buying and selling stand to benefit significantly too, with almost nine out of ten transactions by existing homeowners potentially avoiding the tax"
Despite previous changes to Stamp Duty Land Tax in 2017 aimed at reducing liabilities for first-time buyers, which saw the lower threshold increased to £300,000, the vast majority of first-time buyers in London have remained liable to pay the tax.
If the Chancellor announces plans to scrap stamp duty for purchases up to £500,000 in today's Summer Economic Update, 79% of first-time buyers in London will be able to buy a property stamp duty free – saving £5,845 on average.
In the South East region, the proportion of first-time buyers paying no stamp duty at all on their purchase would increase from 65.2% to 96.6%.
Existing homeowners would also benefit substantially, with 86.4% of purchases across England becoming stamp duty free and just over half (55.3%) of all onward purchases in London incurring zero tax.
Rob Houghton, CEO of reallymoving, said: “This tax giveaway could have a significant impact on the market, particularly in more expensive locations such as London, where the majority of first-time buyers have still been liable to pay stamp duty, and the South East. First-time buyers fortunate enough to have secure jobs and large deposits stand to benefit the most, however, and many still face considerable challenges including an insecure jobs market and the withdrawal of higher loan to value mortgages.
"Those who are in a strong financial position and feel encouraged to commit will make a considerable saving which is far better invested in their first home, helping them to meet lender deposit requirements and increase their equity, than handed over to the Treasury.
“Those who are buying and selling stand to benefit significantly too, with almost nine out of ten transactions by existing homeowners potentially avoiding the tax, not to mention the positive knock on effect further up the chain where buyers would still be liable to pay stamp duty but would benefit from greater transaction volumes across the market.”
