View more on these topics

Head2Head: Is FTB stamp duty cut really hitting the market?


Ben Merritt, mortgage manager, Accord

The government’s changes to stamp duty in November 2017 were a welcome measure for many first-time buyers and I’m not sure it’s just a coincidence that we, and the rest of the market, are seeing an increasing number of people managing to get a foot on the property ladder.

Saving for a deposit, as well as all the legal fees and moving costs – and, previously, stamp duty – is no mean feat for FTBs who are often renting, or experiencing a high cost of living. Stamp duty previously took thousands of pounds out of most FTBs’ savings pots. Its removal for the majority of would-be homeowners enables them to add to their  deposit or moving costs, and maybe to move sooner than planned.

Thanks to the various changes, the government estimates that 60,000 FTBs have benefited so far, and at Accord we’ve seen almost a 10 per cent year-on-year rise in FTB mortgage completions, which could indicate the withdrawal of stamp duty fees has been a positive move.

Last year, 365,000 new homeowners took their first step on to the property ladder, the highest number of FTBs since 2006.

The growth of intermediary lending across the whole market over the past two years has also risen, from 68 per cent in the final quarter of 2015 to 71 per cent in the same period in 2017.

In particular, more and more FTBs are turning to a broker, according to figures from UK Finance, most likely because applying for a mortgage and buying their own home is one of the biggest events someone will face in their adult lives.

The role of the broker in an FTB’s journey to homeownership cannot be understated. Legal & General’s recent research dem-onstrates borrowers rely on the advice from a broker, with eight out of 10 borrowers surveyed stating their broker was invaluable in securing their home loan.

While stamp duty may not be a key driver in preventing people from buying their first home, it is clearly a relief that it’s no longer a consideration for the majority of FTBs.


Mark Bogard, chief executive, Family Building Society

We all moan about politicians. They do an impossible job. This was brought home to me on Budget day when I was the ‘expert’ on a radio phone-in. Great news! The chancellor, desperately short of cash, nevertheless cut stamp duty for first-time buyers. Get the market going from the bottom up!

The first caller had completed his house purchase the week before. Would he get his stamp duty back? “No.” He hated the chancellor. But it was a step in the right direction. Why tax moving at all? It’s the easiest tax to avoid – you just don’t move.

The UK desperately needs a long-term, joined-up housing policy. Instead we get endless, individual ‘initiatives’ and ‘promises’. We’ve mainly had buy-side boosts like Help to Buy and stamp duty holidays, or the latest letoff for FTBs. Of course, what would really help is the sustained building of more new homes than annual household formations, rather than what we’ve had for decades – demand outstripping supply. But that will take years and years to come to pass.

So what to do in the meantime? We need a more liquid housing market. Moving boosts overall economic activity – just try adding up everything you end up spending when you move. And HMRC collects tax on all of it.

One day a government will simply have to bite the bullet and move from the one-off, lump sum tax that stamp duty is to something paid annually.

Rarely, this is something that most economists actually agree on. Short of this, why not help people who want to move for a new job? Or need an extra bedroom for a new child? Or, perhaps most important of all, want to downsize out of their family home as they now use only one bedroom?

At Family, we did a study with the London School of Economics and potential downsizers told us that stamp duty was the second-biggest reason for not doing so. This bungs up the whole housing market, all the way down to the FTBs.

Come on, chancellor, pull out the cork!



Bank of England base rate rise predicted for coming months

The next Bank of England base rate rise may happen as early as May economists are suggesting, with the effect likely to be greater than last year’s rise according to brokers. The Bank of England’s Monetary Policy Committee is due to announce its latest decision on interest rates on Thursday. The Bank has previously hinted […]


The Right Mortgage & Protection Network enters Scotland

The Right Mortgage & Protection Network has opened an office in Scotland. The new offshoot, Right Mortgage & Protection Network Scotland, will supply all of the services the original network does. The new arm will be led by TRMPN business consultant Tracey Frain. Frain was previously an adviser at TRMPN arm Meridian. The Right Mortgage […]


Interest rates predicted to rise in early 2020s

On 2 August 2018, the Bank Of England raised interest rates from 0.5 per cent to 0.75 per cent. The previous base rate rise was in November 2017, from 0.25 per cent to 0.5 per cent, which was the first raise for more than a decade. Mark Carney, governor of the Bank of England, said in August […]


Precise Mortgages launches new 3-year fix through Buy to Let Club

Precise Mortgages has launched an exclusive limited company buy-to-let three-year fixed rate mortgage through Buy to Let Club. The product is fixed at 3.54 per cent until 31 October 2019 up to 75 per cent LTV. It has an arrangement fee of 1.5 per cent. Early repayment charges are 3 per cent until 31 October […]


Out from the long grass? An IT and NI merger

Those with a long memory will recall that at the start of the last parliamentary term George Osborne announced his intention to merge income tax (IT) and national insurance (NI).  Headline grabbing as the initiative was, the reality of the complexities, challenges and costs of such a move resulted in this idea being kicked into the political long grass.


News and expert analysis straight to your inbox

Sign up