In a proactive move to support homebuyers facing increased costs due to an impending stamp duty hike, Skipton Building Society is set to launch a new cashback mortgage range on March 24, 2025. The upcoming reforms to stamp duty thresholds will significantly affect first-time buyers, making it crucial for buyers to complete their purchases before the deadline on March 31, 2025.
As part of its efforts to aid homebuyers, Skipton's new mortgage offers will include cashback incentives of up to 1.5% on five-year fixed-rate loans. This initiative is aimed particularly at those who may not complete their purchases in time to avoid the increase in the costs associated with the tax. With current plans, the nil-rate threshold for the stamp duty will fall from £425,000 to £300,000 for first-time buyers and from £250,000 to £125,000 for movers.
Charlotte Harrison, chief executive of home financing at Skipton Building Society, stated, "Our teams will work round the clock, doing extra hours to help as many first-time buyers complete before the stamp duty changes." This demonstrates the urgency within the sector as buyers rush to finalize their home purchases amidst the forthcoming changes.
Customers will be able to access these products at various loan-to-value (LTV) ratios, including 60%, 75%, 85%, 90%, and 95%. Cashback amounts will be directly deposited into borrowers' bank accounts 15 days after completion, which could ease some financial pressure amidst rising housing costs.
The building society also aims to guarantee the completion of submitted applications where conveyancers provide certificates of title by March 25, 2025. This pledge is crucial as many buyers, particularly first-time buyers, try to navigate the challenges posed by the upcoming changes in homebuying costs.
Recently, Skipton reported a remarkable 54% rise in customers attempting to finalize their house purchases compared to the same period last year. Notably, around half of these customers are first-time buyers keen to secure their homes before the tax adjustments take effect.
However, the transformative reforms to stamp duty mean that the proportion of local authority areas in England where the average first-time buyer home is subject to this tax will see a dramatic increase from 8.4% to approximately 32% overnight on April 1, 2025. This situation further fuels concerns regarding home affordability for new entrants into the housing market.
Harrison remarked on the ongoing affordability crisis, saying, "The upcoming stamp duty reforms will further hurt first-time buyers and Skipton Group has been actively urging the government to maintain the current nil-rate stamp duty threshold of £425,000 for people buying their first home." This clearly indicates an ongoing concern amongst housing advocates regarding affordability and access for potential home buyers.
Through this new mortgage launch, Skipton aims to set a precedent in the mortgage market, providing innovative solutions designed to help aspiring homeowners navigate the challenging landscape. "Today’s new mortgage launch is another example of our innovative product range designed to help more people get on the property ladder and supporting the next generation of homeowners," Harrison added.
As the clock ticks toward the stamp duty deadline, Skipton Building Society is positioning itself as a key player in helping homebuyers manage their purchases effectively. With the impending burden of increased costs looming, the society underscores its commitment to supporting the community while advocating for policies that will assist buyers long-term. The challenges faced by first-time buyers today illustrate the urgent need for viable solutions to ensure homeownership remains attainable.
