“Yesterdays announcement by the new Chancellor Jeremy Hunt has ripped up the vast majority of the Kwasi Kwarteng / Liz Truss Mini Budget from just a few weeks ago. From a property market perspective there remains some good news. The cuts to the stamp duty (the tax paid when you purchase a property) are still intact. This means that the level at which stamp duty becomes payable has doubled to £250,000 from £125,000, which will mean a saving of £2,500 for all new home buyers. While First Time Buyers specifically will not pay any stamp duty on home worth up to £425,000, this is up from the previous threshold of £300,000. This change is reducing the ancillary costs associated with purchasing a new home.
It seems inevitable that there will be a further increase in interest rates to address the inflationary pressures in the economy. Though some speculators are suggesting that the interest rates may not need to rise as high, and may return to lower levels quicker as a consequence of the changes. Thankfully for those property buyers who already have a mortgage offer, it is most unlikely that this will be withdrawn as mortgage offers tend to last for around six months following a property survey. New buyers coming to the market, who are yet to apply for a mortgage will likely now notice the change in the interest rates coming through to the mortgages that are available. We have a number of clients who are considering fixing the term for a longer term, perhaps five years, so that they can be certain what the mortgage costs will be for the medium term, whilst there are fluctuations, this may be suitable approach for some.
No doubt there are trying times for all of us in our community as we continue to face the house hold cost pressures of the Cost of Living Crises. Although the two year utilities support has been modified to six months, I would expect that the Government will keep this closely monitored, and as we have seen recently things can change quickly.”
