The government announced in the Budget that stamp duty will be cut for first time buyers of shared ownership properties up to £500,000.
Gemma Harle, managing director of Intrinsic mortgage network, part of Quilter: “Those hoping that the Budget was going to make sweeping announcements about changes to housing will be disappointed. However, there was a ray of light for those suffering in the dark and gloomy world of the first time buyer market as stamp duty will be cut for first-time buyers of shared ownership homes up to £500,000, which will also be backdated to last year when it was cut for other first-time buyers.
“This is a well-meaning change but will have very little impact as few first time buyers purchase property above £300K even with a shared equity. Therefore this change will not go to the root of the problem, which is that there are simply not enough transactions being done further up the ladder. While we need to do more for first time buyers we should also look to those looking to move for the second or third time to free up more housing stock.”
Simon Stanney, non-life products director at SunLife, added: “Almost a quarter of pensioners are more likely to downsize if they are exempt from stamp duty, according to YouGov. But, despite calls to cut stamp duty for pensioners, the Chancellor has decided not to put any measures in place to make it easier and cheaper for older people to move and I think we will see a spike in equity release as a result.
“While moving to a smaller, more manageable home, is the primary reason for many looking to downsize, releasing cash is the main driver for others. And any pensioners who were waiting to see what would happen in the Budget before making a decision may now turn to equity release following news that stamp duty is here to stay.
“Equity release offers a way of freeing up cash without having to move, and, as the sum released is tax free, I think we will see over 55s increasingly looking to equity release as a tax-efficient alternative to downsizing.”
