This page includes relevant statistics on government schemes for first-time buyers in the UK, including mortgage rates and stamp duty statistics for 2023, as well as uptake figures for government schemes for first-time buyers such as shared ownership, right-to-buy, and right-to-acquire.
There are many accounts and schemes available for first-time buyers in the UK, each offering various benefits and incentives.
Our research collates the most recent statistics on government schemes for first-time buyers in 2023, alongside our own unique data, to show how popular each scheme is, and how these patterns have changed over time.
Analysing past and present trends in mortgage and stamp duty rates, as well as new build statistics helps us to paint a picture of what the first-time buyer mortgage landscape looks like in the UK in 2023.
The mortgage guarantee scheme (MGS) is a government scheme for first-time buyers intended to help those with a 5% deposit get onto the property ladder on a home up to the value of £600,000.
In the scheme, the government provides lenders the option to purchase a guarantee on the top slice of the mortgage. In other words, the government will compensate the mortgage lender for a portion of the net losses suffered in the event of repossession. The guarantee will apply down to 80% of the purchase value of the guaranteed property.
On 20 December 2022, the UK government announced that the mortgage guarantee scheme has been extended until the end of 2023, in a bid to help support more people with a 5% deposit to get onto the UK property ladder.
By the end of 2022, the MGS has supported 24,000 households to buy a property, with an overwhelming majority (85%) being first-time buyers.
UK mortgage lenders can choose whether to opt into the scheme or not. For example, on 22 December 2022, Natwest withdrew from the scheme, and instead launched two, new 95% loan-to-value (LTV) products of equivalent value. This includes a two-year, fixed-rate mortgage deal alongside and a five-year fixed mortgage package. Both came with no product fee and £750 cashback as an incentive.
Compare the best rates on a range of different mortgages including fixed-rate mortgages and flexible mortgages.
There are many accounts and schemes available, offering various benefits and incentives for prospective first-time buyers. Some of the main accounts and schemes currently available are:
Help to Buy was a scheme launched in 2013 by the UK Government, designed to help prospective first-time buyers save for a deposit on their first home. The Government closed new account applications for most of the UK in November 2019.
The scheme ceased to exist for most of the UK in March 2023, but will remain on the market for new applicants in Wales until 31 March 2025.
With the Help to Buy Wales scheme, you must:
Provide a 5% deposit
Take out a repayment mortgage to cover the remaining amount.
The scheme will provide a shared equity loan of up to 20% of the purchase price, should it be required.
So, for example, on a £200,000 property:
Amount | Percentage | |
---|---|---|
Cash deposit | £10,000 | 5% |
Shared equity loan | £40,000 | 20% |
Mortgage | £150,000 | 75% |
(Source: gov.wales)
To be eligible for the Help to Buy scheme in Wales, you must:
Purchase an eligible home up to the value of £300,000 (from 1 April 2023) from a builder who is registered with the scheme
Fund at least 80% of the property price through a repayment mortgage and the required minimum deposit of 5% of the property value
Take out a first charge repayment mortgage with a qualifying lender
Not sub-let any part of the property
Not be renting your existing property and buying a second home through the scheme.
The shared equity loan needs to be repaid within 25 years. However, can be paid off at any point within that period.
The Lifetime Individual Savings Account (LISA) was launched in April 2017 as an intended long-term replacement for the Help to Buy ISA.
LISAs offer the same 25% government savings pledge as Help to Buy, but up to a limit of £4,000 per year (meaning the maximum bonus is £1,000 per year). LISAs can be used to purchase a property worth up to £450,000 anywhere in the UK.
Unlike Help to Buy, this account is not exclusive to first-time buyers as it can also be used to fund your retirement. However, those who withdraw money for a purpose other than buying their first home or retirement may face penalties of up to 25% on their savings.
The First Homes Scheme is a government scheme for first-time-buyers that gives eligible buyers the ability to purchase certain homes for between 30%-50% less than their market value. To be eligible, buyers must get a mortgage of at least half the price of the home they are trying to buy and must have a total household income of no more than £80,000 (£90,000 in London).
The Shared Ownership Scheme gives first-time buyers, and those who do not currently own a home, the ability to purchase a share in a new build mortgage or resale property. In this scheme, the purchaser pays a mortgage on the share they own while paying a subsidised rent to a housing association on the remaining share.
Because the purchaser only needs a mortgage for the share they are purchasing, the amount of money required for a deposit is typically lower on a shared ownership mortgage than on a standard mortgage. Customers normally have the opportunity to increase their share of the property over time.
The Right-to-Buy Scheme is a 40-year-old incentive that allows eligible, public sector tenants to buy their homes at a discounted rate. The scheme was abolished in recent years in Scotland and Wales but currently remains available in England and Northern Ireland for many council house tenants.
But, as the scheme is only offered by certain local authorities, you’ll need to check with your local council to see if this is an option in your local area.
The Right-to-Acquire Scheme is a government initiative similar to the Right-to-Buy Scheme offered by certain housing associations. However, the discounts offered for Right-to-Acquire tenants tend to be lower than Right-to-Buy, and the discount offered is a flat rate that does not vary depending on the length of tenancy.
Our exclusive survey on government schemes for first-time buyers found that the First Homes Scheme was the most likely initiative to be used by prospective first-time buyers. Nearly a quarter (24%) of respondents claimed they intended to use this scheme to fund their first property purchase.
The First Homes Scheme was followed closely by the Help to Buy ISA, which was selected by around a fifth (20.13%) of respondents.
Interestingly, the number of people planning to use no savings account or scheme was nearly double that of the most popular scheme in the study, with around two in five (43%) of people surveyed claiming they intend to fund their first home purchase in this way.
Our study on first-time buyer intentions by salary found that those in the lowest income bracket are the least likely to use savings accounts to fund their home purchase. Around three in five (58%) of respondents earning £15,000 or less claimed they would fund their home without the use of a savings account.
Intends to use a savings account or scheme to save for home purchase | Intends to fund home purchase without savings account or scheme | |
---|---|---|
£15,000 or less | 42.21% | 57.79% |
£15,001 - £25,000 | 59.15% | 40.85% |
£25,001 - £35,000 | 64.79% | 36.21% |
£35,001 - £45,000 | 75.36% | 24.64% |
£45,001 - £55,000 | 72.00% | 28.00% |
£55,001 - £65,000 | 75.56% | 24.44% |
£65,001 - £75,000 | 75.86% | 24.14% |
Over £75,000 | 66.66% | 33.33% |
(Source: Uswitch)
The likelihood of using savings accounts increases as salary rises, before peaking at those earning between £65,000 and £75,000 (75.86%). From here, the numbers drop steeply, with those in the highest income group (over £75,000) almost 9% less likely to use a savings account than those in the next highest group (£65,001-£75,000).
Our regional data on UK first-time buyer savings intentions showed significant differences across the country. Those in Greater London were the most likely to use savings accounts to find their home purchase (69%), followed by Northern Ireland (65%) and the East Midlands (60%).
At the other end of the scale, less than half (48%) of respondents in Yorkshire and The Humber intended to use a savings account to purchase their first home, with the South West (49.70%) and Wales (48.99%) both recording similarly low percentages.
The latest statistics on government schemes for first-time buyers shows that, between 1 January and 31 March 2023, just over 3,200 properties were bought with an equity loan – down 41% from the same period in 2022.
As of March 2023, more than 387,000 properties were bought with an equity loan (since the scheme opened in April 2013). Of these, 328,242 (around 85%) were purchased by first-time buyers. The total value of these equity loans to date is £24.7 billion, with the value of the properties sold under the scheme totalling £109.2 billion.
The latest Help to Buy scheme statistics indicate a sharp decrease in property purchases during the first quarter of 2023. In March 2023, there were 485 fewer Help to Buy property purchases compared to January 2023, representing a 37% decline based on provisional data.
There were 2,247 Help to Buy property purchases in March 2022, compared to just 842 in March 2023, representing a 60% decrease in the previous 12 months. Furthermore, the total number of Help to Buy property purchases in March 2023 is the lowest figure observed in at least 15 months.
The most recent peak in Help to Buy property purchases was in December 2022, with a total of 3,835. This represented a sharp decline of 78% in just four months, as there were only 842 purchases in March 2023, after which the scheme ceased to exist.
Recent UK Help to Buy scheme statistics show that the changes in minimum deposit from 10% to 5% in 2021 had a dramatic effect on average buyer deposits in England. The most dramatic changes can be found in the North East and East Midlands, where the average deposits have more than halved between Q2 2021 and Q3 2022.
Similar reductions can be found throughout the UK, with every region outside of London experiencing average deposit reductions between 20%-45%. In contrast to the rest of the country, London saw their average deposits rise by nearly 2% over this period.
Our exclusive study on Help to Buy equity loans found that the 10 local authorities in which equity loans accounted for the highest percentage of house value were all London-based.
Local authority | Number of equity loans | Value of equity loans (£) | Mean loan value (£) | Median house price (£) | Loan value to house price % |
---|---|---|---|---|---|
Newham | 2,116 | 339,739,244 | 160,557 | 327,192 | 49 |
Greenwich | 2,589 | 438,090,189 | 169,212 | 354,982 | 48 |
Barking and Dagenham | 1,382 | 160,373,771 | 116,045 | 262,918 | 44 |
Croydon | 2,866 | 420,695,648 | 146,788 | 336,042 | 44 |
Tower Hamlets | 2,483 | 443,024,809 | 178,423 | 418,910 | 43 |
Lewisham | 1,477 | 230,392,867 | 155,987 | 375,823 | 42 |
Enfield | 732 | 106,839,153 | 145,955 | 362,186 | 40 |
Hounslow | 1,367 | 200,170,234 | 146,430 | 373,409 | 39 |
Southwark | 1,281 | 236,859,938 | 184,902 | 472,931 | 39 |
Sutton | 1,110 | 150,304,179 | 135,409 | 346,907 | 39 |
(Source: Uswitch via Department of Levelling Up, Housing and Communities, Stats Wales, and HM Land Registry House Price Index)
With a median loan value of around £161,000, and a median house price of just over £327,000, Newham topped our list with a loan value-to-house price percentage of 49.1%.
Newham was followed by Greenwich which, despite having a higher median loan value than Newham (£169,212), had a lower loan value-to-house price percentage due to its substantially higher median house price (£354,982).
Despite having more equity loans than any other place in the top 10, Croydon’s overall equity loan value (£421 million) was lower than both Tower Hamlets (£443 million) and Greenwich (£438 million), suggesting people in those areas are saving more on average.
The highest median loan value in the top 10 was found in Southwark, where the median loan of £184,902 would account for 39.1% of the average property price. Outside of London, eleventh-placed Preston was the highest local authority, with a loan value to house price percentage of 37.1%.
Local authority | Number of equity loans | Value of equity loans (£) | Mean loan value (£) | Median house price (£) | Loan value-to-house price % |
---|---|---|---|---|---|
Elmbridge | 313 | 23,609,140 | 75,429 | 565,714 | 13.3 |
Mole Valley | 256 | 15,930,437 | 62,228 | 460,590 | 13.5 |
Rutland UA | 275 | 11,988,182 | 43,593 | 283,002 | 15.4 |
Three Rivers | 300 | 21,983,519 | 73,278 | 475,171 | 15.4 |
Kensington and Chelsea | 24 | 4,894,330 | 203,930 | 1,281,802 | 15.9 |
St Albans | 323 | 24,626,492 | 76,243 | 478,571 | 15.9 |
Brentwood | 428 | 26,688,449 | 62,356 | 384,151 | 16.2 |
Windsor and Maidenhead UA | 501 | 37,216,576 | 74,285 | 452,891 | 16.4 |
Epsom and Ewell | 289 | 21,287,047 | 73,658 | 430,974 | 17.1 |
Dacorum | 935 | 59,180,826 | 63,295 | 370,004 | 17.1 |
(Source: Uswitch via Department of Levelling Up, Housing and Communities, Stats Wales, and HM Land Registry House Price Index)
The vast majority of the 10 local authorities where equity loans accounted for the lowest percentage of house value were based in the south of England, with the East Midlands town of Rutland (joint-third place) being the only exception.
Elmbridge was found to be the local authority where equity loans made up the lowest percentage of property value. With an average loan value just above £75,000, and a median house price of £565,714, equity loans in Elmbridge accounted for just 13.3% of the average property value.
Though second-placed Mole Valley had a lower average loan value than Elmbridge, its comparatively low median house price of £460,590 meant that equity loans accounted for slightly more of the average house price (13.5%).
With just 24 equity loans in the entire area, Kensington and Chelsea had the lowest volume of equity loans anywhere in England. Despite a relatively high average loan value of more than £200,000, the London borough’s exceptionally high median house price of around £1.3 million means that these loans only account for 15.9% of the overall property value.
Local authority | Number of equity loans | Value of equity loans (£) | Mean loan value (£) | Median house price (£) | Loan value to house price % |
---|---|---|---|---|---|
Blaenau Gwent | 92 | 3,404,000 | 37,000 | 91,802 | 40.3 |
Merthyr Tydfil | 151 | 5,738,000 | 38,000 | 107,628 | 35.31 |
Rhondda Cynon Taf | 580 | 20,880,000 | 36,000 | 114,400 | 31.47 |
(Source: Uswitch via Department of Levelling Up, Housing and Communities, Stats Wales, and HM Land Registry House Price Index)
Our exclusive data on Help to Buy equity loans in Wales found that Blaenau Gwent was the Welsh local authority in which equity loans make up the highest percentage of the overall house price.
With a mean loan value of £37,000 against a median house price of £91,802, the average equity loan in Blaenau Gwent would account for just over 40% of the average house price in the area. This figure is nearly 9% lower than the highest English local authority, Newham, and is lower than the top five English places in total.
Despite a higher mean loan price, Merthyr Tydfil came second thanks to its substantially higher median house price of £107,628. Both Merthyr Tydfil (35.31%) and third-placed Rhondda Cynon Taf (31.47%) had equity loan value percentages that were lower than the top 10 English local authorities.
Local authority | Number of equity loans | Value of equity loans (£) | Mean loan value (£) | Median house price (£) | Loan value to house price % |
---|---|---|---|---|---|
Vale of Glamorgan | 930 | 36,270,000 | 39,000 | 228,061 | 17.1 |
Monmouthshire | 277 | 12,465,000 | 45,000 | 261,081 | 17.24 |
Pembrokeshire | 306 | 10,098,000 | 33,000 | 178,762 | 18.46 |
(Source: Uswitch via Department of Levelling Up, Housing and Communities, Stats Wales, and HM Land Registry House Price Index)
With a mean loan value of £39,000, and a median home value of £228,061, the Vale of Glamorgan’s loan value-to-house price total of 17.1% was the lowest recorded in Wales. This was nearly 4% higher than the lowest score in England, Elmbridge, and matches the joint-tenth highest score in England.
Despite having the joint-highest median loan value of anywhere in Wales, Monmouthshire’s relatively median high house value of £261,081 means that this loan would only account for 17.24% of property values in the area.
Though Pembrokeshire has a considerably lower median house price (£178,762) than both Vale of Glamorgan and Monmouthshire, the south-west county’s mean loan total of £33,000 meant that it still found its equity loan value percentage (18.46%) among the smallest of the local authorities in Wales.
The latest first-time buyer statistics show a significant annual increase in people using their LISA account for a house purchase. Between 2019-20 and 2021-22, the total number of house purchase withdrawals increased by nearly 300%, from 9,400 to 36,000.
During this time, the total value of withdrawals more than quadrupled, and the average value of withdrawals increased by more than a quarter (27%) to £12,461.
Tax year | Number of individuals withdrawing for a house purchase | Total value of house purchase withdrawals (£) | Average value of withdrawal for house purchase (£) |
---|---|---|---|
2018-19 | 50 | 281,000 | 8,526 |
2019-20 | 9,400 | 92,166,000 | 9,784 |
2020-21 | 21,850 | 251,488,000 | 11,498 |
2021-22 | 36,000 | 448,675,000 | 12,461 |
(Source: gov.uk)
Recent Lifetime ISA statistics show that the number of people making early withdrawals from their accounts has accelerated rapidly in recent years. The biggest increase was between 2019-20 and 2020-21 when the figure almost tripled, from 17,850 to 51,550 at the height of the Covid-19 pandemic.
The most recent figures show another sharp rise of around 50% in total unauthorised withdrawals between 2020-21 and 2021-22. Despite this, the average value of unauthorised withdrawals has decreased by nearly 50% over this period.
Tax year | Number of individuals making unauthorised withdrawals | Total value of unauthorised withdrawals (£) | Total value of unauthorised withdrawal charges (£) | Average value of unauthorised withdrawals (£) |
---|---|---|---|---|
2018-19 | 8,650 | 21,003,000 | 5,251,000 | 2,423 |
2019-20 | 17,850 | 38,583,000 | 9,635,000 | 2,161 |
2020-21 | 51,550 | 170,634,000 | 34,128,000 | 3,310 |
2021-22 | 77,550 | 132,279,000 | 33,069,000 | 1,706 |
(Source: gov.uk)
The latest Right-to-Buy statistics found that the number of Right-to-Buy sales increased by around 52% between 2020-21 and 2021-22. Despite this, the figures remain nearly 10% lower than they were in 2019-20, suggesting that the COVID-19 pandemic was likely a contributing factor to the comparatively low numbers for 2020-21.
In 2016-17, the total number of buyers reached a high of 18,100, meaning overall figures have declined by around a quarter (23%) in the following five years.
The latest Right-to-Acquire statistics reported an annual rise of around 80% in purchased properties funded by the scheme between 2020-21 and 2021-22. Despite this, figures remain around 33% lower than their decade peak in 2018-19, when 2,080 homes were purchased under the scheme.
Recent statistics on government schemes for first-time buyers show a steady increase in the number of people using the Shared Home Ownership Scheme to fund house purchases. After a rise of over 50% between 2017-18 and 2018-19, total purchases rose a further 7% the following year.
After dropping below 17,000 in 2021-21, the number of purchases increased by around 14% in 2021-22 to 19,386—the highest annual total since the scheme opened.
UK interest rates are set by the Monetary Policy Committee (MPC), which is part of the Bank of England (BoE). Generally, if the economy is slowing down, the MPC may reduce interest rates in order to stimulate growth. However, if inflation is becoming an issue, then the MPC could decide to increase interest rates.
As of January 2023, the rate of inflation in the UK stood at 10.8% – 8.8% above the BoE’s target for inflation. Therefore, in order to help counteract this, the BoE made the decision on 2 February 2023 to increase the Base Rate to 4% This was followed by another decision on 23 March 2023 to further increase the base rate to 4.25% (the highest it has been since October 2008).
The most recent adjustment to the interest rate occurred in August 2023, when the BoE lifted the base rate from 5% to 5.25% – a 200% increase on the same time last year in August 2022.
Changes to the BoE Base Rate normally have an impact on the interest rates for first-time buyers offered by UK mortgage lenders. With more than 850,000 people buying their first property in 2021-22, according to the recent first-time buyer statistics, this is a significant number of people who may be affected by these changes.
At the end of November 2022, the average UK mortgage interest rate stood at 2.39%, meaning households would pay an average of £3,540 interest in a year. For new loans, the average rate was 3.36%, resulting in UK first-time buyers paying an average of £6,348 in yearly interest repayments.
It’s worth consulting a mortgage broker, who can compare deals on different types of mortgages, to find the best first-time buyers' mortgage rates for you.
Find out the latest UK mortgage statistics on a range of key sectors including remortgaging statistics and buy-to-let stats.
First-time buyer stamp duty land tax (SDLT) relief was first announced and implemented in the 2017 Autumn Budget.
From 2018 to 2020, over £1 billion was spent on SDLT tax relief for first-time buyers, saving money for some 441,700 claimants.
Between July 2020 and September 2021, the UK government announced an SDLT holiday as part of relief efforts to cope with the economic impacts of the COVID-19 pandemic. This helped cause a large fall in claimant numbers during 2020-21 (94,000), and a partial rebound for 2021-22 onwards (132,800).
On the 23rd of September 2022, the government increased the nil-rate threshold on SDLT for first-time buyers from £300,000 to £450,000. This means that UK stamp duty for first-time buyers doesn’t apply on the first £425,000, as long as the overall property value is less than £625,000. This is likely to result in an increase in the number of claimants for SDLT relief.
Cost (£mn) | Cost (% GDP) | Number of claimants | |
---|---|---|---|
2017-18 | 160 | 0.01% | - |
2018-19 | 520 | 0.02% | 219,000 |
2019-20 | 540 | 0.02% | 222,700 |
2020-21 | 190 | 0.01% | 94,000 |
2021-22 | 345 | 0.02% | 132,800 |
2022-23 | 345 | 0.01% | - |
(Source: gov.uk)
HMR annual stamp tax figures published in January 2023 show that almost four in five (79%) of SDLT relief claimants in 2021-22 were first-time buyers in their 20s and 30s. This is a slight reduction from 2018-19 when the respective figure was 82%.
During 2021-22, less than half (45%) of first-time buyers in the £125,000-£300,000 price band were in their 20s, and over a third (35%) were in their 30s. Conversely, in the £300,000-£500,000 price band (where a 5% reduced rate is paid on anything over £300,000), less than half (44%) of users were in their 30s, and under a third (32%) in their 20s.
More than three-quarters of property transactions eligible for SDLT relief are in the £125,000-£300,000 price band. However, more relief is paid out on more expensive purchases. Although a larger volume of people in their 20s benefit from the relief, older users may benefit more in terms of monetary savings.
According to UK stamp duty statistics, there has been a gradual rise in the forecasted cost of SDLT relief since its inception in 2017, when figures stood at £125 million. As of 2022-23, forecasted costs for SDLT relief were more than five times greater than in 2017, at £670 million.
From 23 September 2022, SDLT relief for first-time buyers was awarded to those wishing to purchase a property for £625,000 or less, provided the purchaser intends to occupy the property as their main residency.
Between 1 July 2021 and 30 September 2021, there was no tax payable on the first £250,000 of the purchase price, so relief claims during this period would have been limited. The cost relief in 2020-21 and 2021-22 is therefore much lower (£420 million) than the original forecast.
For 2022-23, the estimated cost for SDLT relief is set to be £345 million – almost 50% less compared to the forecasted figure – yet the same amount as 2021-22 estimated costs.
The revised higher threshold for tax relief (no tax is payable on the first £425,000 of the purchase price) was introduced on 23 September 2022, which has resulted in a rise in the forecasted value for 2022-23.
As of 2021-22, there were 14,100 properties claiming SDLT tax relief – 1,110 (8%) of which were to those with new leases. This represents double the amount for 2020-21 when the respective figure stood at just 610. That said, the total number of properties which claimed SDLT tax relief that year was also at a low of 8,670, therefore, as a percentage, figures remained about the same (7%) for properties with new leases.
Country/Region | Residential transactions (000s) | Residential property value (000s) | Residential receipts (000s) |
---|---|---|---|
UK | 1,210 | 416,405 | 10,170 |
England | 1,175 | 410,755 | 10,105 |
North East | 55 | 9,960 | 130 |
North West | 160 | 35,590 | 555 |
Yorkshire and The Humber | 115 | 27,355 | 350 |
East Midlands | 105 | 28,075 | 370 |
West Midlands | 115 | 28,780 | 450 |
East of England | 140 | 51,055 | 1,085 |
London | 140 | 96,055 | 3,920 |
South East | 210 | 88,625 | 2,290 |
South West | 135 | 45,265 | 955 |
Northern Ireland | 35 | 5,650 | 65 |
(Source: gov.uk)
In 2022, there were over 1.2 million residential transactions across the UK totalling almost £416.5 million. Of these, around 2.5% (10.1 million) claimed SDLT relief, the overwhelming majority (99%) of which were located in England.
Almost four million properties in 2022 claiming SDLT relief (38%) were situated in London, followed by more than a fifth (22%) in the South East (constituting almost 2.3 million properties).
At the other end of the scale, just 65,000 properties in Northern Ireland claimed SDLT tax relief in 2022, making up just 0.6% of all UK properties that claimed for the year.
Land Transaction Tax (LTT) replaced Stamp Duty Land Tax (SDLT) from 1 April 2018 across Wales.
As of 2023, the current LTT threshold is:
£225,000 for residential properties (if you don’t own other property)
£225,000 for non-residential land and property.
Price threshold | LTT rate |
---|---|
The portion, up to and including £225,000 | 0% |
The portion over £225,000, up to and including £400,000 | 6% |
The portion over £400,000, up to and including £750,000 | 7.50% |
The portion over £750,000, up to and including £1,500,000 | 10% |
The portion over £1,500,000 | 12% |
(Source: gov.wales)
If you already own one or more residential properties, then you may be liable for a higher rate of LLT.
In addition, there is no relief for first-time buyers in Wales.
Stamp duty in Scotland is referred to as Land and Buildings Transaction Tax (LBTT).
Following the Scottish Budget on 15 December 2022, the Additional Dwelling Supplement (ADS) has increased from 4% to 6%, causing a change to previous LBTT rates.
Tax band | Normal rate | Additional Dwelling* |
---|---|---|
Less than £145k | 0% | 6%** |
£145k - £250k | 2% | 8% |
£250k - £325 | 5% | 11% |
£325 - £750k | 10% | 16% |
Rest over £750k | 12% | 18% |
(Source: Stampdutycalculator.org)
* Percentage figures show combined LBTT and ADS rates. ADS is calculated in addition to the LBTT, and is applied at 6% to the total purchase price over £40k.
** An additional dwelling purchased for less than £40k will require 0% tax. For purchases between £40k and £145k, the rate will be 6% on the full purchase price.
In Scotland, no tax will be paid for a single property purchase on the first £145,000, which then rises to 2% for properties between £145,000 and £250,000. This rises up to 12% for properties over £750,000.
LBTT for first-time buyers in Scotland was introduced in June 2018. By increasing the initial threshold for LBTT to £175,000, the Scottish Government expects the majority of first-time buyer property transactions will result in no tax having to be paid.
Tax band | First-time buyer rate |
---|---|
Less than £175k | 0% |
£175k - £250k | 2% |
£250k - £325 | 5% |
£325 - £750k | 10% |
Rest over £750k | 12% |
There was a fairly even split of detached homes built between rural and urban areas, with the slight majority (around 55%) of the 7,224 homes built in urban areas for Q2 2022.
Property location | Detached | Semi-detached | Terraced | Flats/maisonettes |
---|---|---|---|---|
Urban: Major Conurbation | 660 | 483 | 4,024 | 260 |
Urban: Minor Conurbation | 124 | 138 | 33 | 31 |
Urban: City and Town | 3,204 | 2,031 | 1,770 | 920 |
Urban: City and Town in a Sparse Setting | 12 | 13 | 20 | 4 |
Rural: Town and Fringe | 1,572 | 713 | 205 | 238 |
Rural: Town and Fringe in a Sparse Setting | 68 | 37 | 6 | 10 |
Rural: Village | 770 | 383 | 41 | 165 |
Rural: Village in a Sparse Setting | 20 | 7 | 0 | 8 |
Rural: Hamlets and Isolated Dwellings | 760 | 374 | 135 | 118 |
Rural: Hamlets and Isolated Dwellings in a Sparse Setting | 34 | 22 | 0 | 6 |
(Source: ONS)
The latest new build statistics show there were far more terraced houses built in major urban conurbations than anywhere else in Q2 2022. With 4,024 terraced homes built in major conurbations, this type of area was responsible for more than double the number of new build terraced properties in all other types of settings.
Terraced houses had by far the biggest disparity between rural and urban areas of all property types, with around 94% of the 6,234 terraced homes built found in urban locations in Q2 2022. By contrast, of the 4,201 semi-detached homes built in this quarter, around 63% (2,665) were built in urban areas. In this instance, urban newbuilds outnumber rural newbuilds by more than 1,100.
The highest volume of semi-detached homes built in Q2 2022 were found in towns and cities. With a total of 2,031 semi-detached houses for this quarter, towns and cities saw nearly three times more homes of this type built than the next most popular area type (Rural: Town and Fringe).
New build statistics for flats and maisonettes found just 1,760 were constructed in Q2 2022 – the lowest of all four property types. As a percentage, there were around 75% fewer flats and maisonettes built compared to detached houses for that quarter.
Of the flats and maisonettes built, more than half (920) were found in towns and cities, with a further 15% found in major urban conurbations. Overall, for flat and maisonette construction in Q2 2022, the split between urban and rural areas was around 70% and 30%, respectively.
The latest new build statistics for January to March 2023 show regions in the east of the UK rank highest, with the East Midlands starting 9.60 new builds and completing 8.61 new builds per 1,000 dwellings. This is followed by the East of England in close second (starting 8.67 and completing 8.84 per 1,000 dwellings in the first three months of 2023).
By comparison, 5.47 new builds were started and 5.59 new builds were completed per 1,000 dwellings in London during the same period.
Yorkshire and The Humber is seen last in the rankings, with just 5.08 new homes started and 5.60 new builds completed in Q1 2023 per 1,000 dwellings. This represents 47% fewer new builds started and 35% fewer new builds completed when compared to the East Midlands in first place.
New build statistics for the UK were almost 60% lower than Austria, who topped the list for number of construction starts for new residential properties (6.47 per 1,000 citizens). Other countries to breach the top 10 for new housing units per thousand citizens in Europe include:
Liechtenstein (5.81)
Serbia (5.66)
France (5.53).
The UK also ranks 50% lower than its neighbour, Ireland, in seventh place (5.26 construction starts for new residential properties per 1,000 citizens). However, the UK does succeed a few notable countries in the ranking, placing above both Germany (2.58) and Italy (1.02).
The latest first-time buyer customer satisfaction statistics found high scores for the vast majority of construction companies. The best score was recorded by CALA Homes with a customer satisfaction rating of 95.2% from the 1,417 homeowners sampled. CALA Homes were followed by Barratt Developments and Bellway Home, which both recorded customer satisfaction rates of 93.3%.
Home builder | Sample surveyed | Percentage |
---|---|---|
Avant Homes | 1,025 | 85% |
Barratt Developments | 8,460 | 93.30% |
Bellway Homes | 4,851 | 93.30% |
Bloor Homes | 2,017 | 95.20% |
CALA Homes | 1,417 | 95.20% |
Countryside Partnerships | 1,205 | 91.20% |
Crest Nicholson | 1,030 | 89% |
Keepmoat | 1,569 | 89.90% |
Miller Homes | 2,032 | 91.50% |
Persimmon Homes | 6,674 | 91.30% |
Redrow Homes | 2,483 | 91.60% |
Taylor Wimpey | 5,233 | 91% |
Vistry Homes | 4,066 | 92.60% |
(Source: Home Builders Federation)
Of the 13 companies in the study, only three received customer satisfaction scores below 90%, with Keepmoat, Cater Nicholson, and Avant Homes recording scores of 89.9%, 89%, and 85%, respectively.
The latest European first-time buyer report found England to be among the lowest countries on the continent for the amount of newly built homes per capita in 2021. With an average of 2.56 new build homes per 1,000 citizens, England ranked 19th out of the 22 countries included in the study.
England’s figures were around 76% lower than Austria, who topped the list (10.6 new builds per 1,000 people) and nearly 60% lower than the Republic of Ireland in joint-fourth (6.05 new builds per 1,000 citizens).
There are a variety of schemes and incentives in the UK to help first-time buyers get onto the property ladder. Projects introduced by the UK government include the First Homes Scheme, Shared Ownership Scheme, Right-to-Buy, and Right-to-Acquire. In addition, a Lifetime Individual Savings Account (LISA) was brought in as a long-term replacement for the Help to Buy ISA.
In England and Northern Ireland, first-time buyers will only pay stamp duty on homes costing more than £425,000. For properties between £425,001 and £625,000, a discounted 5% stamp duty land tax (SDLT) is imposed. Any property valued at £625,001 or above comes with no tax relief for first-time buyers.
If the property being purchased is under £425,000, and it’s your first home, then the property will not be liable for stamp duty. Between £425,000 and £625,000, stamp duty is restricted to 5%, for the portion exceeding the minimum amount. For example, a £500,000 home will have a stamp duty cost of £3,750 for first-time buyers.
From September 2022, first-time buyers are exempt from paying stamp duty on properties up to £425,000 in value. Between £425,001 and £625,000, first-time buyers will only pay 5% on this portion of the property’s value. Should a first-time buyer purchase a property that is £625,001 or higher, then they would be eligible for the standard rate of stamp duty tax like all other purchasers on the market. These rules are set to remain until 31 March 2025.
The Right-to-Buy Scheme was introduced in 1980 and allows eligible council house tenants to buy their homes at a discounted rate. The maximum discount is £96,000 across England, except London (£127,900), and increases each April in line with the consumer price index (CPI).
Different levels of discount are awarded depending on the property type. Providing you have been a public sector tenant for between three and five years, a 35% discount is awarded for houses compared to 50% for flats. After five years, the discount increases (1% for houses and 2% for flats) for every extra year you’ve been a public sector tenant, up to a maximum of 70% (or £96,000 across England and £127,900 in London borough)—whichever is lower.
The scheme was abolished in Scotland (2014) and Wales (2018), but currently remains available in England and Northern Ireland for many council house tenants. However, because this scheme is limited to specific local authorities, it’s important to reach out to your local council to find out if it’s available in your area.
The Help to Buy equity loan ended in England in 2023. All new applications closed on 31 October 2022 with completions required by 31st March 2023.
The UK government budget announcement in March 2023 had very little that focused on the property sector or helping first-time buyers get onto the property ladder. In September 2022, Chancellor (of the time) Kwasi Kwarteng announced a cut to stamp duty for properties bought in England and Ireland, meaning an increase in the threshold for first-time buyers from £300,000 to £425,000.
The changes have resulted in 200,000 people having to pay stamp duty tax. In addition to this, the property value on which first-time buyers can claim stamp duty was raised from £500,000 to £625,000.
Shared ownership is not exclusively for first-time buyers. While it is commonly associated with first-time buyers, shared ownership schemes are also available to individuals who have owned property before but cannot afford to purchase a home independently in the current market.
Therefore, shared ownership is open to both first-time buyers and those who have previously owned property.
https://www.bbc.co.uk/news/business-63005427
https://www.gov.uk/right-to-buy-buying-your-council-home/discounts
https://researchbriefings.files.parliament.uk/documents/CBP-8828/CBP-8828.pdf
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