Jennie Hedges

Senior Associate & Conveyancing Executive

DATE PUBLISHED: 01 Nov 2018 LAST UPDATED: 13 Apr 2022

Budget effects for first time buyers, Shared Ownership and Help To Buy properties

On Monday 29th October 2018 Philip Hammond made his Autumn Budget speech. Starting with the words “Today, I present to the House a Budget for Britain’s future…..”, Mr Hammond confirmed that the Government would provide a further £500m towards the housing infrastructure fund which he hopes will unlock 650,000 homes.

In the 2017 budget, Stamp Duty Land Tax was abolished for first time buyers buying a home up to £300,000. If the purchase price was greater than that sum, then duty was calculated on the additional amount only. This year, those first time buyers buying property through the Government’s Shared Ownership Scheme will also benefit, with no duty payable up to £500,000.

For first time buyers not using the Shared Ownership Scheme, duty between £300,000 and £500,000 will be set at 5%. This is a saving of £5,000 against the previous rate for a purchase at £500,000.

Shared Ownership is a scheme whereby you buy part of a property (e.g. 40%) and pay rent on the unowned share to a Housing Association. You can buy extra shares in the property, and as your share increases, the rent decreases.

For Shared Ownership first time buyers, this new relief is backdated to 22nd November 2017. This means that if you were a first time buyer buying a Shared Ownership Property from that date you can claim back any duty paid.

To claw back the monies, you should write to HMRC giving details of the transaction, including the Unique Transaction Reference Number. The solicitor acting for you in the purchase will be able to give you this information. Claims must be made by 28th October 2019.

Also in the budget, it was confirmed that there will be a new Help to Buy Scheme starting in April 2021. The current scheme ends in March 2021 and the new system will run for two years until March 2023. The scheme is currently available to first time buyers and existing home buyers in England looking for a new build home. Unlike this existing arrangement, the new scheme will only be available to first time buyers.

Prices will be capped by region (the South West will be £349,000 and the South East £437,600) to a maximum of £600,000 in London. There is no plan to continue Help to Buy beyond March 2023.

Help to Buy is an equity mortgage of up to 20% (40% in London) of the property value. You must put down at least 5% deposit. You pay nothing during the first five years and from year six a monthly interest charge.

Here at Ellis Jones, our specialist team has over 14 years’ experience of dealing with all shared ownership and Help to Buy transactions. We had a stand at this weekend’s exhibition at Poole Lighthouse run by Help to Buy South West. It was a well attended event, with plenty of first time buyers looking at shared ownership and Help to Buy properties, all keen to get on the housing ladder. Encouragingly, there were a number of developer stands advertising their new estates all willing to take part in the Help To Buy scheme itself.

If you have questions about Help to Buy or Shared Ownership and would like to speak to our specialist solicitors, please contact us today on 01202 525333 or email us here.

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