Stamp duty cut ‘could save’ homebuyers £1bn per …

The stamp duty cut announced by the government in last week’s mini-Budget could save homebuyers across England more than £1 billion per year, according to the latest research from London agency Benham and Reeves.

In last week’s fiscal address, new Chancellor Kwasi Kwarteng announced the biggest tax cuts for 50 years, with changes to stamp duty chief among these.

As a result, stamp duty land tax (SDLT) will only be payable on property purchases above £250,000, up from £125,000 previously. Meanwhile, first-time buyers will only pay the tax on purchases starting at £425,000, up from £300,000 previously. 

The move is set to save the average homebuyer £2,500, while first-time buyers stand to save up to £8,750.

But what of the impact to the market as a whole? Benham and Reeves examined sold price data for the 574,091 homes sold over the last year, calculating the level of stamp duty that was owed versus the amount that would have been owed under the new guidelines. 

Its findings show that the 574,091 homebuyers to have completed on a property purchase across England in the last year paid more than £5.8 billion in stamp duty, but had they benefited from the stamp duty reduction announced last week, the total stamp duty payable would have fallen to £4.8 billion, a potential saving of nearly £1.029 billion per year for purchasers throughout England.

Breaking things down on a regional basis, it’s buyers in the South East who could stand to save the most, with the latest cuts slashing the tax burden by £227.6 million a year.

It’s a similar story for homebuyers across the capital, with the total level of stamp duty on annual basis set to fall by £147.7 million. Elsewhere, homebuyers in the East of England are estimated to experience a saving of £144.9 million.


Homebuyers in the North East, where the potential saving is at its lowest because house prices are generally cheaper in the first place, homebuyers still stand to save £24 million a year as a result of the stamp duty cut.

“Any saving will be warmly welcomed for those looking to climb the property ladder, particularly in the current economic climate and, collectively, the nation’s homebuyers stand to save a significant sum as a result of the latest stamp duty changes, Marc von Grundherr, director of Benham and Reeves, said.

“But today’s cut is fairly insignificant in the grand scheme of things and will do little to help homebuyers overcome the huge initial hurdle of saving that all important mortgage deposit.” 

He added: “In fact, it’s fair to say that it will only add to the problem by fuelling demand and pushing house prices higher, while the government maintains a head in the sand approach to housing delivery.”

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