Stamp duty cut set to save homebuyers thousands in Lancashire
Almost nine in ten people buying properties before March 2021 will not pay any stamp duty fees, meaning a potential average saving of £3540 for buyers in Preston and Lancashire.
Chancellor of the Exchequer Rishi Sunak unveiled a series of economy-stimulating measures to the House of Commons, including a cut to stamp duty tax and a slashing of VAT.
These measures unveiled by the Chancellor are aimed at offsetting the negative economic impacts caused by the coronavirus pandemic and lockdown.
Speaking to fellow MPs during his Summer Statement yesterday, July 8, the Chancellor said the aim of the plan is to "protect, support and create" jobs.
The Stamp Duty Land Tax (SDLT) is paid on increasing portions of the property price above £125,000 when you buy residential property, for example a house or flat.
Courtnie Parker, 21, from Preston, bought a house in Rossendale last year and paid stamp duty. Along with partner Sam, she hopes to buy a new property to build her portfolio, and aims to buy before next year, before the stamp duty will be reintroduced.
She said: "As a young person wanting to develop a property portfolio, this is going to really help me purchase my first buy to let, as not only am I saving for 25% of the property, I was also saving for the stamp duty and solicitor fees.
"So this has really helped as I am going to be able to start my portfolio much faster and it has also given me that push to get the sale through before March 2021.
"I definitely think that this will boost the economy, as property developers will definitely be buying lots of property before the stamp duty is re introduced as it’s extremely beneficial for them."
The announcement indicated that the Chancellor has now raised the threshold that stamp duty tax is paid in England and Northern Ireland.
He said: "Right now, there is no stamp duty on transactions below £125,000. Today, I am increasing the threshold to £500,000. This will be a temporary cut running until March 31 2021 and, as is always the case, these changes to stamp duty will take effect immediately.
"The average stamp duty bill will fall by £4,500. And nearly nine out of 10 people buying a main home this year will pay no stamp duty at all."
Based on the current average house price, some 96% of areas across England and Northern Ireland will now see the average homebuyer pay no stamp duty at all based in the current average house price there. According to Zoopla, the current average value of a property in Preston is £177,131, sitting slightly higher than the Lancashire average of £173, 321.
This means that almost nine in ten people buying properties before March 2021 will not pay any stamp duty fees. This will equate to a saving of £2,465 for the average buyer in England.
More locally, it means a saving of around £3540 for buyers in Preston and Lancashire.
Local estate agent Lawrence Rooney, based in Longton, discussed what this means for home buyers locally. Director Andrea Rooney said they are in the "busiest market" they have seen since starting the business, but hopes the cut to the stamp duty will encourage more people to come onto the market and support the local economy.
She commented: "Prior to lockdown, the market had been getting busier from the beginning of the year. People are wanting to move even more now as they may have lived in their properties through lockdown and may have potentially saved money so are in a position to move.
"In South Ribble, we were already in a booming market as we have big industries here. Although, I expect this decision to cut stamp duty will boom the property market further.
"For anyone who was undecided about coming onto the market, this potential saving means they may now want to continue with moving house because the savings are quite considerable for any buyer, but particularly those selling houses upwards of around £250,000. I actually have one vendor completing their sale on Friday, who has potentially saved upwards of £6,000.
"My hope is it will help areas where the property market was struggling before and I hope that the savings will be used in the local economy. I am also very conscious we have a lot of local businesses in the area who are still waiting to open and need all the support possible. We hope any reduction in stamp duty will help to put more money in to other local businesses and the local economy to support all businesses in the area."