End of stamp duty will make a 'psychological difference'
The end of the stamp duty holiday will not affect the finances of first-time buyers purchasing homes, but it will be a psychological disinclination, according to a mortgage expert.
When compared to putting a deposit down, having to cough up the extra money for stamp duty will be relatively inconsiderate. Yet, people have an incentive to get on the property market before March 24th that they will no longer have afterwards.
Even if people are not saving that much money, the perception of stamp duty holiday is that they are, the director of MyMortgageDirect explains.
Catherine Hearnden said: "We've got people rushing to get their mortgages through before the stamp duty holiday ends and then that has just made the figures look better but afterwards, everything goes off again because people haven't got the incentive anymore, so it is a bit more psychological as well as just financial."
"I think it will do more damage [to the market] because something which they have been given as an incentive is taken away and that knocks confidence again."
The stamp duty holiday has meant that any first-time buyer purchasing a house under £250,000 is exempt from the one per cent stamp duty levy.
It was introduced by the government two years ago as an incentive to get first-time buyers on the property market.
After the holiday ends on March 24th anyone buying a home that costs between £125,000 and £250,000 will have to pay the tax, with the level of tax increasing in price bands.
Sandra Carter, a sales manager at Barratt Northampton, has emphasised that buyers should make use of the stamp duty holiday because when it is reintroduced they will be financially disadvantaged.
The most a homeowner can save is £2,500 if they buy a house at the upper end of the spectrum, costing £250,000. The minimum saving is £1,250.
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2012-03-02 12:26:16 © Moneyextra.com