Major changes could make buying a home a little easier for first-time buyers in the UK. Chancellor Rachel Reeves’ recent Budget contained several key updates which will impact the housing market.
It’s big news for those taking their first steps onto the property ladder. One of the main changes is to Stamp Duty.
The temporary increase in the Stamp Duty Land Tax (SDLT) for first-time buyers, raised to £425,000 in September 2022, will end in April 2025. From that point, first-time buyers will again only benefit from the SDLT relief on properties up to £300,000. While this is a reduction, it does clarify the situation for those planning to buy in the next few years, the Mirror reported.
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In other news for first-time buyers, Reeves also confirmed the introduction of 5,000 new affordable social homes with an additional £500 million in funding. This is part of the government’s wider goal to build 1.5 million new homes over the next four years to address housing shortages.
But there is a concern that the government’s push for more social homes may affect shared ownership and first home schemes which have been popular with first-time buyers. Additionally, Right to Buy has seen changes, including a reduction in the maximum discount available for council homes from up to £136,000 to just £38,000.
While these changes unfold, first-time buyers can still take advantage of the Rent a Room scheme allowing them to earn up to £7,500 tax-free by renting a room in their property. This could provide crucial extra income and help to reduce mortgage costs.