The Intermediary – February 2025 - Flipbook - Page 31
Nicholas Mendes, mortgage technical manager
The impact is twofold: fewer first-time buyers
at John Charcol, acknowledges that while the
able to purchase and more forced to delay their
maximum saving of £2,500 may not seem game-
plans, leading to increased demand in an already
changing, it comes at a time when affordability is
stretched rental market. If supply cannot keep up,
already stretched.
rents could climb even higher, making saving for
“This is relatively small compared to broader
affordability challenges, particularly as mortgage
a deposit even tougher, in a vicious cycle.
Short notes: “The new rules will likely reduce
rates remain a key factor in buyer decision-
access to the market for many first-time buyers,
making,” he concedes.
especially in the more expensive local markets
“If buyers bring forward their purchases to
meet the deadline, demand could ease slightly
post-April, which may reduce pressure on
house prices.”
However, for those unable to buy in time,
where the local property values smash through
the newly lowered SDLT thresholds.”
For some, the only viable option will be moving
back in with their parents in order to save – a
scenario many will have hoped to avoid. With
particularly in high-cost areas, renting remains
Stamp Duty relief disappearing and affordability
the only option – potentially pushing up rents
worsening, the 'Bank of Mum and Dad' is about
as more would-be buyers are locked out of
to see a sharp rise in “boomerang” tenants.
homeownership.
Nowhere is the outlook more bleak than
in London, where sky-high property prices
Homeownership hurdles
and shrinking affordability are creating the
For many hopeful first-time buyers, the
perfect storm.
Government’s decision to lower Stamp Duty
Martese Carton, director of mortgage
thresholds is not just a setback – it’s an eviction
distribution at Leeds Building Society, warns that
notice from their homeownership dreams.
the average first-time buyer renting privately in
With budgets now even tighter, buyers may
have to either compromise on location and
property size to chase lower tax bills, or cough up
thousands more just to get a foothold.
As Colby Short, CEO of GetAgent.co.uk, points
the capital will now need to save for an additional
12 months before they can afford a property.
“The Government’s decision not to increase the
thresholds at which people start paying Stamp
Duty will mean buyers will have to pay Stamp
out, this all comes at a time when house prices
Duty on 93% of the houses currently on the
remain stubbornly high, and show “little sign
market in England, up from 70% under current
of falling.”
rules,” she says.
p
February 2025 | The Intermediary
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