98% of those purchasing a home will pay less stamp duty.

We welcome the changes to stamp duty which mean that 98% of homebuyers purchasing a home will pay less.

The mortgage industry has lobbied for a change in the current system for many years, however the announcement in the Chancellor’s Autumn Statement still came as a surprise.
 
The duty was previously payable on the full purchase price of a house with higher percentages applied to higher value properties. It has long been considered unfair because as you moved into a new band the tax was payable on the entire price of the house-not just the amount that was over the band threshold. This meant that when a property went into a new stamp duty band, even by a small amount, the tax payable increased significantly. It also meant that houses for sale were often priced with stamp duty thresholds in mind, leading to artificial ‘cliff edges’ in property prices priced at certain stamp duty bands.
 
Under the new system the duty is calculated in a similar way to income tax so that now if a property goes into a higher stamp duty band the higher percentage is only applied to the amount above that threshold, leading to a smoother, graduated system. The new bands for different property values are:
 
£0 to £125,000: 0%
£125,001 to £250,000: 2%
£250,001 to £925,000: 5%
£925,001 to £1.5m: 10%
Over £1.5m: 12%
 
 
On a property with a purchase price of £155,781 (the average cost of a home in the North West according to the National Housing Federation), a buyer would pay around £616 in stamp duty as opposed to £1,558 under the old system.
 
Our Head of Sales and Marketing, Ian Keeling, said: “This is a very sensible move by the Chancellor as it will help many buyers financially and also correct the distortions created in house values by the old system.”
 
At the Vernon we have mortgage advisers based at each of our local branches and offer special incentives on selected mortgage products for buyers within a 25 mile radius of Stockport.  Please click here to contact your nearest branch.

Head office:

Vernon Building Society
19 St Petersgate
Stockport
SK1 1HF

Tel: 0161 429 6262
Fax: 0161 477 3303
Email: info@thevernon.co.uk

Telephone calls are recorded and may be monitored for regulatory and training purposes to help maintain service quality.

*The 'AER' stands for Annual Equivalent Rate and illustrates what the interest rate would be if interest was paid and compounded once each year.

YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE

Vernon Building Society is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and Prudential Regulation Authority (registration number 195475).  You can check this on the Financial Services Register. We are also a participant of the Financial Services Compensation Scheme (FSCS). Details of the scheme can be obtained from www.fscs.org.uk

Telephone calls are recorded and may be monitored for regulatory and training purposes to help maintain service quality.

For independent information about financial products and services visit  www.moneyadviceservice.org.uk

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