Demand after stamp duty break

It has been revealed that mortgage lenders and estate agents have reported a rise in demand from prospective first-time buyers, after the government's announcement of a two-year stamp duty holiday for them.

The Easter holiday period is commonly the busiest weekend for home purchasing and conveyancing inquires.

The break means that a tax saving of up to £2,500 could be made for genuine first time purchasers for homes of up to £250,000.

Peter Bolton King, chief executive at the National Association of Estate Agents, agrees the move is a great step in the right direction for a property revival.

However, he hopes that the paperwork required to prove that first-time buyers have not owned a property before will not be too burdensome. "That responsibility will fall to solicitors when doing conveyancing," he said.

Phil Cliff, mortgage director at a property firm stated that 2009's stamp duty holiday on properties worth up to £175,000, which ended on December 31, stimulated the market.

Therefore, he predicted the latest move on stamp duty will have a similar effect. "We have been calling for change in this area to help genuine first-time buyers," he commented.

Couple praise stamp duty break

One couple who have definitely benefited from the stamp duty break are Kristy Carter, 25, and Michael Perrett, 26. The couple are moving from rented accommodation to buy an endofterrace house in Hampton, southwest London for £246,000. They are in line to save £2,460 in tax.

Michael, a production controller for a railway engineering company, said: "We budgeted for everything down to the last penny, so this stamp duty windfall is really good news.

"It means we can afford to buy some furniture quicker than we might otherwise have done. We'll probably keep some money in the bank for emergencies." The couple hope to complete the deal early next month.

Michael added: "We've spent a lot of time trying to build up our deposit to 15% so that we could qualify for an affordable mortgage. Paying no stamp duty should help others get there more quickly."

Another first-time-buying-couple who have found the new stamp duty rule to work in their favour is Kimberly Hornby and Scott Bishop, both 26, who will save up to £1,800 on their duty when they move into their new property.

They were forced to borrow £10,000 each from their parents to cover the cost of the £27,000 deposit. Without that help they would not have been able to contemplate buying a house.

Miss Hornby was thrilled at the cut in stamp duty. She commented: "I have literally used up all my savings on the deposit. I have £1 left in my account.

"I think this scheme is great for first time buyers - it's so difficult to find the money to buy a home. We stand to save in the region of £1,800. We could go on holiday with this money but I think we'll try to be sensible and put it back into our savings."

The stamp duty holiday is temporary, running until March 25, 2012, but the new 5% tax band on homes worth £1m or more appears to be permanent.

Due to a stamp duty break, first-time-buyers have swamped the housing market. As a result, conveyancing experts have stated that the holiday is a great step in the right direction for a property revival this year.