The latest Housing Outlook Report by the Resolution Foundation has said that although house prices are projected to fall as a result of the pandemi
The latest Housing Outlook Report by the Resolution Foundation has said that although house prices are projected to fall as a result of the pandemic, this won’t make it easier for first-time buyers to buy a house. Only those who had high levels of saving before the pandemic or those who can borrow from family will benefit from this situation. So who are first-time buyers? Can you qualify twice?
From November 22, 2017, first time buyers paying £300,000 or less for a residential property have paid no Stamp Duty Land Tax.
First time buyers paying between £300,000 and £500,000 normally pay SDLT at 5 percent on the amount of the purchase price in excess of £300,000.
However, at the moment there is a Stamp Duty Holiday on residential properties up to £500,000. This applies to everyone, including first-time buyers.
From July 8, 2020 to March 31, 2021, the special rates for first time buyers is replaced by the new rates.
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This increase is problem for first-time buyers, since most of them won’t be buying purchases up to this revised threshold.
The Government’s new Stamp Duty holiday takes away the advantage first-time buyers had over others.
On top of this, lenders will now be asking for a larger deposit.
The average first-time buyer family of about 30 years old who is putting aside 5 percent of their income would need to save for over 20 years to pay for the deposit.
What qualifies you as a first-time buyer?
You would think a first time buyer is just someone buying a house or flat for the first time.
However, Gov.uk defines a first-time buyer as “an individual or individuals who have never owned an interest in a residential property in the United Kingdom or anywhere else in the world and who intends to occupy the property as their main residence”.
This means that to be considered a first-time buyer, you must not be a ‘home-mover’, ‘homeowner’, a ‘buy-to-let investor’, or remortgaging.
To qualify for the tax-free perk, you must have never owned a property anywhere in the world.
Can you qualify TWICE?
You cannot qualify as a first-time buyer twice.
To be considered a first-time buyer, you’ll need to have never owned a property.
It doesn’t matter if the property was shared ownership or you owned it jointly with someone else.
The property you are buying as your first home needs to be your main residence, not a buy-to-let or second home.
Even if you have owned a caravan as your main residence, you still won’t be considered a first-buyer.