Homebuyers are considering their options amid a flurry of activity that is having a major impact on the housing market.
On the plus side, the government has announced a cut in stamp duty and extra help for first-time buyers, together with plans to release more land for newbuilds.
On the negative side, the Bank of England has raised the base interest rate by half a per cent to 2.25% and says it will not hesitate to increase it again if the pound continues to fall and inflation continues to rise.
The uncertainty over interest rates has led many banks to withdraw some fixed rate mortgages temporarily while they produce new products to suit buyers in these uncertain times.
Chancellor Kwasi Kwarteng was very positive when announcing the stamp duty cuts, saying: “Cuts to stamp duty will get the housing market moving and support first-time buyers to put down roots. New Investment Zones will bring business investment and release land for new homes in communities across the country.
“The nil rate band will be doubled from £125,000 to £250,000, meaning that 200,000 more people every year will be able to buy a home without paying any Stamp Duty at all.
“And the Government is going even further to support first time buyers, who will now pay no stamp duty up to £425,000 and increasing the value of the property on which first time buyers can claim relief, from £500,000 to £625,000.”
The changes took effect from midnight, 23 Sept 2022.
The Chancellor also announced that he will further support homebuyers by increasing the disposal of surplus government land to build new homes, increasing supply.
It remains to be seen whether buyers consider the savings on stamp duty to be enough to cancel out the increase in interest rates, but many experts believe there will be a slowdown in the housing market.
That, however, provides an opportunity for people who are still keen to buy as they may have a bigger selection of properties and be able to negotiate a lower price than has been possible up to now.
Please contact us if you would like advice about the legal aspects of buying or selling a home.