Alistair Darling MP announced that stamp duty for all house sales of up to £250,000 is to be scrapped. The removal of the lower stamp duty threshold is designed to make it easier for first-time buyers to step onto the property latter.
The Chancellor used his third budget, and the last before the General Election, to remove the lower band of stamp duty, which has proved a significant barrier for people looking to buy their first home. Mr Darling said the move would double the stamp duty threshold for first time buyers from £125,000 from ‘midnight tonight for this year and next’.
Darling alters stamp duty limit
By scrapping stamp duty on properties being sold for up to £250,000, the government hopes to generate more house sales at a time when the mortgage market is particularly flat. Figures just released reveal that the number of approved mortgages totalled £2.8 billion in February, down on the six-month average of £3bn.
The mortgage market has been suppressed so far this year, not least because the stamp duty threshold reverted to £125,000 from £250,000. According to the Council of Mortgage Lenders if the £250,000 starting threshold for stamp duty had existed in 2009, around nine-in-ten first-time buyers would have been exempt from paying.
5% stamp duty on £1m properties
The chancellor also announced that stamp duty would rise to 5% for houses sold for £1 million, from April 2011.
For more information on mortgages, see the Which? homeowner advice guide.
Which? Money when you need it
You can follow @WhichMoney on Twitter to keep up-to-date with our Best Rates and Recommended Provider product and service reviews.
Sign up for the latest money news, best rates and recommended providers in your newsletter every Friday.
Or for money-saving tips, and news of how what’s going on in the world of finance affects you, join Melanie Dowding and James Daley for the Which? Money weekly money podcast
For daily consumer news, subscribe to the Which? news RSS feed here. And to find out how we work for you on money issues, visit our personal finance campaigns pages.