Help to Buy extended to 2023 and shared ownership Stamp Duty relief

31 October 2018

Chancellor of the Exchequer, the Rt Hon Philip Hammond MP, has delivered his 2018 Budget, which included a series of housing announcements aimed at contributing towards the Government’s target of building 300,000 new homes every year. For first time buyers, the extension of Help to Buy and a cut to stamp duty for shared ownership purchases will be of particular interest.

Help to Buy

The Help to Buy equity loan scheme will now run until March 2023, but from April 2021 it will only be open to first-time buyers and maximum property values will be restricted.

Launched in 2013, the scheme offers a 20% equity loan to those buying a new home up to the value of £600,000 in England (40% for those buying within Greater London). Buyers aren’t charged loan fees for the first five years of owning their home.

From April 2021, the upper price cap for the properties eligible for the scheme will now be 1.5 times the average first-time buyer price forecast for the region; this means the maximum cost of a Help to Buy home in London will increase from £450,000 to £600,000. The £250,000 cap on houses outside London will also change to reflect regional variations in house prices, meaning the maximum value of homes which can be bought through the scheme will decrease in some areas: for example, buyers in the North East will only be able to use the scheme for properties worth up to £186,100.

Stamp Duty relief for first time buyers of shared ownership homes

The Government announced it will abolish Stamp Duty for all first time buyers of shared ownership properties valued up to £500,000. Exemption from Stamp Duty will be retrospective, so those who have bought between 25% and 75% of a property in England and Northern Ireland since the last Budget on 22 November 2017 will be able to claim a refund on the entire amount of Stamp Duty paid.

The announcement follows the abolition of stamp duty for first time buyers purchasing a home worth up to £300,000 in last year’s Budget; according to the Chancellor, this has helped 121,500 people, and the number of first time buyers is now at an 11-year high.

For further information, please see the Budget Red Book – Stamp Duty changes can be found at Section 4.9 and Help to Buy at Section 5.11.