Chancellor Kwasi Kwarteng has announced a cut to stamp duty in his mini-budget.
The new Chancellor, speaking in the House of Commons this morning, said the changes would mean an extra 200,000 people would now avoid having to pay the tax.
“So, to support growth, increase confidence and help families aspiring to own their own home, I can announce that we are cutting stamp duty.
"In the current system, there is no stamp duty to pay on the first £125,000 of a property’s value. We are doubling that – to £250,000.”
Mr Kwarteng also said the stamp duty threshold for first-time buyers would be increased from £300,000 to £425,000.
Within an hour of the announcement traffic to property website Rightmove jumped by 10 per cent, it said.
Raising the threshold to £250,000 means that a third of all homes currently for sale (33 per cent) are now completely exempt from stamp duty in England (up from 7 per cent when the threshold was £125,000), the website reported.
It means that two thirds of homes (66 per cent) are now exempt from stamp duty for first-time buyers in England.
Rightmove’s housing expert Tim Bannister said: “Demand has been softening over the last few months but today’s announcement is likely to stimulate some more demand.
"If it does lead to a big jump in prospective buyers competing for the constrained number of properties for sale then it could lead to some unseasonal price rises over the next few months.
"But because the change is permanent, and because of gathering headwinds such as rising mortgage rates, we expect to see a more gradual increase in demand compared with the surge when the temporary stamp duty holiday was announced in 2020. Plus, buyers could save up to £15,000 during the temporary stamp duty holiday, while the savings are lower with this change.
"The first-time buyer threshold change means we could see more first-time buyers who can afford it making a jump to a bigger home as their first move.
"With more buyer demand we would also expect that the current trend of more properties coming to market will continue, offering more choice for buyers.”
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