What does the Budget 2017 and the recent interest rate rise mean for homebuyers?
On November 22, Chancellor Philip Hammond’s Autumn Budget 2017 included the removal of stamp duty for first time buyers on homes costing less than £300,000, and reduced rates on homes with a value up to £500,000.
On how the budget might impact the landscape for homebuyers, David Thomas, CEO Barratt Developments, said “We welcome the Government’s continued focus on housing, the stamp duty cut will help more young families get a foot on the property ladder and further planning reform is vital to increasing housing supply – overall this is a positive budget putting housing front and centre where it belongs.”
The changes to stamp duty in the Budget have arrived shortly after the announcement on November 2 that interest rates had been raised for the first time in ten years. Adrian MacDiarmid, Head of Mortgages at Barratt Developments plc suggests “Our message is simple. Just because there has been a small rate rise, that shouldn’t put people off buying a home. Over the last 4 years interest rates for a typical 85% mortgage have dropped by two whole percentage points, so even if they now go up a little bit, historically they are still very low.
“We are not expecting a swift return to the high rates of the 1980s and 1990s, although we always advise people to take independent mortgage advice from a broker who can advise on affordability. And with the government announcing new funding to the tune of £10 billion to support Help to Buy, now really is a good time to get on the property ladder with just a 5% deposit.”