On 8th July the Chancellor of the Exchequer, Rishi Sunak, announced a number of economic initiatives aimed at reducing the financial toll of the pandemic on businesses and consumers.
A notable announcement was the increase in the stamp duty threshold on property purchases in England and Northern Ireland. Effective immediately, stamp duty land tax will not apply to the first £500,000 of all property sales in England and Northern Ireland.
The temporary measure will last until 31st March 2021, and should provide incentive to those looking to purchase new build properties. The change will mean that the average stamp duty bill will fall by £4,500, which could mean the difference to many prospective homeowners in making a purchase decision.
The money saved could enable buyers to bolster deposits and therefore opt for lower LTV products, particularly beneficial in a time where 90% LTV products are few and far between.
A further aim of the stamp duty change is to boost the construction and house building industry, worth over £39bn a year and supporting 750,000 jobs. As Sunak said in his announcement, the changes made are designed “to catalyse the housing market and boost confidence”.
