Lowering or removing stamp duty takes away one of the leading costs of buying a property, and one of the up-front costs. This is one of the barriers that first-time buyers face and the removal of this up-front cost should enable more money to be used towards the deposit. Given the importance of the deposit when it comes to obtaining a mortgage or a more attractive mortgage rate, this should be seen as a positive initiative for first time buyers.
Changes have to come in the market
This assistance is a positive step but first-time buyers are not the only people requiring assistance when making a property move. You will find that first time tenants have a lot of bills and expenses to cover when they move into property, and new tenants could benefit from help too. Therefore, it is pleasing to hear that assistance for first time tenants is on the way but sadly, the help is unlikely to be offered until 2019. This is bad news for new tenants who would benefit from help in the months that lie ahead.
Some of the up-front costs that new tenants have to meet include:
- The first month’s rent
- A deposit, which could be worth two month’s rent
- Letting fees
- Removal costs
It is not uncommon for new tenants to face bills in the thousands when they want to move into a flat, and this can cause issues, even preventing some tenants from moving into property. However, in 2019,with some sources suggesting spring of 2019 as being the most likely time for a change, it is likely that there will be changes to two of these aspects.
The Government is looking to make changes
The Government has announced that it plans to remove letting fees, and will fine any letting agent that imposes the fees. This should help tenants to save money. While it is believed that the average level of letting fees is around £230, there is evidence of tenants having to pay more than £1,000 in letting fees.
Another positive step comes with the capping of the deposit amount, which looks set to be pegged at a level of six weeks rent. This could still reach an expensive level but having a limit in place would be a good starting point in reducing fees.
Anyone looking for help in becoming a tenant, or if you are a landlord looking for guidance on how these changes may impact on your business, come and speak to us. At Austin Property Services, we are always happy to help and look forward to assisting you.