March 6th, 2014
The Bank of England has this afternoon held the underlying rate of interest in the UK at 0.5%. They have also held back on any further economic stimulus, as they watch the housing and mortgage markets gather pace.
A major announcement took place this week in the contractor mortgage market, when Halifax announced that they were going to pay stamp duty for certain buyers. When they ran a similar campaign last year many contractors flocked to the bank to take advantage. The incentive was only available for several weeks before it was withdrawn due to very popular demand.
The incentive is available on selected interest rates, and will spark a wave of interest for many looking to make the initial move onto the property ladder. The good news for contractors is that Halifax pride themselves on being a contractor-friendly lender, so this substantial saving will come as welcome news, when combined with contract-based income assessment.
The deal has been capped solely for first time buyers looking to purchase properties up to the value of £250,000, which means that the largest saving could be as high as £2,500. For any contractor purchasing under the minimum 1 per cent stamp duty threshold of £125,000, the bank has stated that £250 cash back on completion will be offered.
The current stamp duty levels are set so that a contractor purchasing a property under £125,000 will pay no levy, with any home over this price commanding a 1 per cent charge against the purchase value, to an upper limit of £250,000.
The expectation for 2013/2014 is that £6.7bn will be raised for HMRC from the tax, and Halifax believes that as many as 75 per cent of all purchasers will be required to pay the costs. In London, due to the high value of purchasing a property, Halifax have predicted as many as 98 per cent of first time buyers will pay the levy on their first purchase.
The head of sales at Halifax, Ian Wilson, noted: “We know that stamp duty can often be a cost that is overlooked, particularly by first time buyers who are focused on saving an initial deposit for a house. We helped ease the burden of stamp duty for over 14,000 first-time buyers last year and we’re keen to do what we can to once again support those buying their first home, at what’s already an expensive time.”
Simon Butler, Senior Mortgage Consultant at Contractor Mortgages Made Easy commented: “This incentive raised a lot of interest when Halifax launched the option last Easter, and it is sure to raise more this time round. With house prices rising on an almost weekly basis, and the chances of the offered products not being widely available for a prolonged period, it will certainly pay for any contractor looking to buy for the first time to move sooner rather than later and get the bank to pay one of the highest costs of moving as part of the mortgage deal.”
Article By: Taj Kang, Business Development Director at Contractor Mortgages Made Easy
Media Contact: Raman Kaur, Public Relations Manager
Tel: 01489 555 080
Email: media@contractormortgagesuk.com