Survey reveals aspiring first time buyers don’t understand stamp duty
Despite stamp duty changes which are beneficial for first time buyers, millions of aspiring home owners in England are in the dark about the property tax, new research has found.
Almost a third, some 31% of English first time buyers don’t know if stamp duty changes are good for them while 13% wrongly think that the change could save them more than £5,000, according to the study from online broker L&C Mortgages.
The survey found that 52% think they will benefit from the stamp duty abolition when they buy their first home. Of those aiming to buy a property priced between £125,000 and £500,000, some 42% either thought that stamp duty relief would not benefit them, or didn’t know if it would, demonstrating a further lack of knowledge about the new rules.
It also found that 22% have not changed their minds on the price of the house they want to buy in light of these stamp duty changes and this may be because they do not know the impact the new rules will have on their potential purchase.
Some 38% said that they didn’t know how much they would save if they bought their first home now, while 62% said they believe that the tax should be abolished for all first time buyers.
On top of this, 38% think the value of the properties excluded from stamp duty should rise in line with house prices, highlighting further the belief that the current measures won’t go far enough, and will need to be kept under close review.
‘More needs to be done in order to ensure that first time buyers know what is available to them. The stamp duty relief is welcomed by many who are looking to buy their first home, but the new rules could be considered complicated to someone who hasn’t been through the process of purchasing property before,’ said David Hollingworth from L&C.
‘In fact, the lack of understanding uncovered through our research could mean that some first time buyers think that owning their own home is one step further away than it actually is when in reality, a saving of up to £5,000 could be the difference in getting the required deposit together, or dropping to a lower LTV bracket,’ he pointed out.
He explained that the number of first time buyers who believe that the tax should be abolished for all those buying their first home, speaks of the need for clarity. ‘Of course abolishing stamp duty for all would mean financial savings for many, but it also highlights the desire for a more simple and transparent system,’ he added.