Christmas came early for first-time buyers who were handed a tax cut of up to £5,000 after the Chancellor abolished stamp duty for many of them in Budget 2017.
Katie Bourke, 30, a chartered accountant at Ernst & Young in London is one of them.
She is about to buy her first home – a £335,000 one-bed flat in Battersea, south London.
Following yesterday’s Budget giveaway she’ll see her stamp duty bill crash from £6,750 down to £1,750 – a welcome saving of £5,000.
Coming up roses: Katie Bourke is about to buy her first home and is one of the lucky first-time buyers set to keep a massive £5,000 after stamp duty was axed yesterday
Chancellor Philip Hammond abolished the tax for first-time buyers purchasing a home of up to £300,000, and for properties costing up to £500,000, no stamp duty will be paid on the first £300,000.
Mr Hammond said this meant 95% of first-time buyers would see stamp duty cut, while 80% would pay none at all.
But the Office for Budget Responsibility (OBR) has warned that the changes would push up house prices and leave home ownership further out of reach for many.
The OBR, which provides independent analysis of the UK’s public finances, predicted house prices would rise 0.3 per cent over the next year as a result of the move – making existing property owners the main beneficiaries of the tax cut.
But for Katie, it provides a very welcome saving right now.
‘It’s just going to make such a massive difference for me,’ she says.
‘You spend all that time, years and years, staying in and saving for the deposit and then you find out there’s another seven grand to pay in cash on the day you get the house.
Axeing stamp duty will benefit many firt-time buyers ready to get on the housing market. Pictured: A house for sale in London
‘It’s stressful and it’s a lot of money – it’s not like any first-time buyer who’s been saving hard to buy a flat has some other cheeky separate savings stashed away to pay for the stamp duty.
‘But by cutting it yesterday, it will mean I have a real buffer which is making the whole process so much less stressful. Before, I was putting absolutely every last penny I have into this so I’d have moved in and if the boiler had broken, I’d have been stuffed.’
Katie moved back in with her mum after renting in London for years so she could save as much as possible each month.
After three years and a helping hand from her parents, she finally had enough to secure a mortgage.
‘I’m really lucky I could move home to help me save – I know friends whose parents live really far away who have to pay London rents which are crazy. For them it’s impossible.
‘I was also really fortunate that I had help from my parents for the deposit – house prices are really high and even with my budget, it was quite small for London.’
She’s planning to use some of the £5,000 she’s saving in stamp duty to improve the flat when she gets the keys.
‘I can now afford to make it feel like home, update the kitchen a bit and maybe put in a shower. Before, I’d have just had to move in and live with it exactly how it is until I could save enough again to do the work.’
Chelsie Love, 27, an environmental consultant with Waterman Group and her boyfriend Matthew Cox, who works in finance, saved for almost one year to accumulate nearly £10,000 for stamp duty costs
And Katie is not alone in her appreciation of the stamp duty cuts.
Chelsie Love, 27, an environmental consultant with Waterman Group and her boyfriend Matthew Cox, who works in finance, saved for almost one year to accumulate nearly £10,000 for stamp duty costs.
But they will now only have to pay approximately half of that at £5,000.
The couple have saved diligently for years to buy their first home which was a daunting goal in London’s competitive housing market and yesterday’s fiscal treat was very welcome.
They are due to move into a new two-bedroom £395,000 flat in Morello, a Redrow development in Croydon, south London with a deposit of £79,000.
Chelsie told The Times: ‘For many of our friends who can barely afford a deposit, stamp duty has created a real barrier to owning a home. I think this stamp duty holiday will really move the needle for some people.’
‘I’ve focused extra hard this year on saving . . . but it’s really not all about avocado brunches. Buying when prices are so high is just so difficult. Every little helps.’
For sale: Despite seemingly happy news for first-time buyers, the Office for Budget Responsibility warned that the radical changes would simply push up house prices
Sheena Dempsey, an award-winning children’s book illustrator and author based in London, is also due to get the keys to her first home in January with her partner, an IT professional.
They are set to save £1100 thanks to yesterday’s Budget and although she was pleased by the news she questioned what real impact it would have on the housing crisis.
Sheena has frequently felt the very real frustrations of that housing crises since she started searching for her own home in London in 2014.
But last month she decided to place a deposit on a large apartment in Fokestone, Kent, instead where prices for quality housing stock were much lower than in the capital.
Sheena told MailOnline: ‘I feel from a personal point of view that removing the tax is a good thing.
‘Obviously we are delighted to save the money but I’m not sure how it tackles the housing crisis overall because I’m sure vendors will just add it on to asking prices once people have more for deposits’.
‘We’ve tried every which way to be able to afford in London but it’s just never going to happen until thousands of new properties are built here.’
‘We started looking in 2014 but at that stage everything was shooting up. Things quickly became unaffordable, much to our frustration so we looked into the Shared Ownership scheme for a while and nearly bought a place in Brockley, south east London.
‘But it just didn’t seem like it was worth it. It was still very expensive for tiny little apartments allegedly worth 600k. And with that scheme, you have all the pitfalls of renting and none of the advantages of ownership.
‘So we eventually decided to move out of London, which is sad for us on one hand but I’ve increasingly been feeling like I’m clinging on to the edges of a city that I can’t really afford to live in.’
Sheena’s budget was approximately £270,000 and she found a large apartment close to the beach in Folkestone for £180,000.
‘The house we are moving to is a Victorian townhouse over three floors, with four bedrooms.
‘I will have my own studio at home, an office for my partner as he will be doing some days at home and commuting to London the others. And a spare bedroom. It’s perfect for us.
‘Folkestone has a lot to offer, it’s a beautiful, vibey, seaside town with an ever-increasing creative community.’