Dentists Who Invest Podcast
Official Podcast of the Dentists Who Invest platform. Talking all things investing, money and finance with a dental spin. Have you ever wondered how you can grow your wealth and protect your hard earned money as a Dentist? We've got you covered. Featuring famous guests such as Andrew Craig, Edward Zuckerberg and Benyamin Ahmed we delve deep into EVERY aspect of finance to educate and empower ALL Dentists.
Dentists Who Invest Podcast
First Time Buyers Beware with Sarah Grace DWI-EP319
Do your mortgage repayments feel high?
Connect with Sarah here: https://www.dentistswhoinvest.com/sarah-grace-mortgages/
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Navigate the upcoming stamp duty changes with mortgage expert Sarah Grace. Scheduled for April 1, 2025, these changes could mean higher costs for first-time buyers as the 0% threshold lowers from £425,000 to £300,000. Sarah breaks down the impact of Liz Truss’s 2022 policy and what this means for first time buyers and others in the market. We also explore broader effects, like the reduced 0% threshold for all buyers, and consider if the Labour government’s upcoming budget will offer any relief for first-time buyers.
Listen in as we plan a post-budget episode with Sarah to provide up-to-date analysis of new policies impacting first time buyers. Connect with Sarah at sarah-grace.co.uk or call 0208 633 8888 for expert advice. Prepare to make informed decisions in the evolving first time buyer market!
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first-time buyers. But where? Why are we saying that? That let's jump straight in with resident dentistry? Invest mortgage expert, Sarah grace. How are you, Sarah?
Sarah:hi James. Yeah, very good, thank you very good we've, we've.
Dr James:We've titled this podcast rather scarily, haven't we?
Sarah:but there is something that first-time buyers need to know right yes, yes, there is a horrible potentially stamp duty change on the 1st of April 2025, which comes about from Liz Truss. She did do something good in September 2022, which was giving stamp duty discounts for first-time buyers, but that is ending on the 1st of April. Now this podcast is being done on what? The 24th of October, the 30th of October, when the Labour government have their budget, you know it might change, but as things stand today, there is quite a cliff edge on the 1st of April.
Dr James:I see, yeah, so it's important to get that little caveat in right that Kieran might switch it around. So we're recording on the 24th, as you say, going to be releasing this podcast early November. So this is as things stand. Kieran might switch it up, but there's still going to be a lot of this that it's very unlikely that he's going to change all of this, and some of this will hold true, right yeah, like if they do nothing and this, this change does come into effect on the 1st of April.
Sarah:it will be the first time that there is not been any first time by a scheme from probably I think it was about 2012, after Credit Crunch, when they were trying to get the housing market going again, they introduced the help to buy scheme. It'll be the first time that they have got no first plan buyer scheme whatsoever. So I think that they will do something, but what that's going to look like, nobody knows.
Dr James:We're going to find out. You know what, like nobody knows, we're going to find out. You know what it might be nice to do. It might be nice to give us a little bit of a lay of the land as to the current, as to how things currently stand whenever it comes to stamp duty, because I know that what we're related, what we're what we're talking about, what we're referencing in the title of this podcast, is stamp duty and how that is expected to change over the next few months. How do things currently stand for first-time buyers whenever it comes to stamp duty? What are the tax thresholds and percentages?
Sarah:Okay, yeah, so at the moment, first-time buyers have no stamp duty to pay on purchases up to 425. So 424,999, there is no stamp duty payable at all. Then, anything over 425 up to, uh, 624999, you just pay five percent. So in theory, you, if you purchased at 625 or 624999, you, you, you pay 10k stamp duty. But from from the and that's for completions up to the 31st of March 2025 from the 1st of April that will increase to 21,250. So it's going to cost you an extra 250 pounds. And what they're doing is they're removing that 0% up to 425 and they're reducing it down to 300,000, which it was pre-Liz Trust. So you only get the first 0% up to 300,000. So if you're purchasing at 425, at the moment that's all free, and then from the 1st of April that's going to be reduced to 300,000.
Dr James:Oh, I see. So the tax, the threshold at which you're paying tax, is lowered massively, but they're not. As things stand right now. The percentages are still the same. Is that correct?
Sarah:yeah, yes, the percentages are still the same, it's just that the thresholds that they start have been reduced. So at the moment, anybody whether you're a first-time buyer, home mover or anything at the moment you you have no stamp duty to pay on up to £250,000. From the 1st of April, that's going to be reduced down to £125,000, which is what it used to be.
Dr James:Is there a maximum age on the first-time buyer benefits that you have there?
Sarah:No first-time buyers. You can be a first-time buyer at age 70.
Dr James:I see understood. What about people who are buying another home? How does that look whenever it comes to the current stamp duty setup?
Sarah:Yeah, so basically nothing's really changed other than that 0% is being reduced to 125 instead of 250. So it basically means that everybody else their stamp duty is going to increase by two and a half two thousand. Um, is it two thousand? Yeah, it's two thousand five hundred, sorry, uh. So so everybody else is going to have to pay two and a half thousand extra on stamp duty on any purchases over 250 pounds gotcha 250 000 points.
Dr James:Okay, amazing, okay, brilliant. So really, first-time buyers is is the particular area that things are going to move around quite a lot. Uh, just getting that caveat in there one more time as things stand, but it'll be so interesting to see what cure comes up with over the next few days. Any predictions on that front? Has he? Has he talked about property? Has he? Has he given us a warning?
Sarah:I've seen in, you know, my uh sort of industry press on that.
Sarah:But there's lots of, lots of things sort of saying, oh well, you know, there's nothing for first-time buyers, we've not got help to buy. And and you know the the thing that everybody's talking about, his, his, them, saying that they want to build all of these millions of new homes. And, uh, you know, they're saying, well, hang on, he wants to do that in his five-year tenure. Um, yet how on, you know, getting the planning, getting developers to, you know, draw plans, getting the planning permission and all of that sort of thing, realistically that's going to be losing one to two years. So they're like there's no way that he's going to be able to get the, the houses built within five years.
Sarah:But but he's, he's uh sort of pledging, so well, we'll, we'll say, we'll say, like you know, even if all of the planning was done there, there isn't the resources, ie the builders, to build them, whether you know whether we've got enough bricks, wood and and windows and that to sort of build all of these houses. Um, you know, there's a lot of, there's a lot of question marks understood.
Dr James:Okay, cool, well, it's pleasing. It's good, I suppose, from property owners perspective, people here in the property's perspective uh, that he hasn't said that he's necessarily going to touch anything at this stage whenever it comes to the tax side of things. However, there is every chance that he could still do that. Just because he hasn't said specifically that he's going to go there doesn't mean that he won't, of course.
Sarah:Like, obviously, I think that there will be something happening on capital gains tax, won't there? So if people are selling assets like, well, your main residence is capital gains tax free, but any investment properties that you have, if you're going to look to dispose of them, I think there's going to be much higher tax rates than that. From what that there's, that, I think there's going to be quite a hike in capital gains tax one thing it is worth mentioning.
Dr James:As you were saying a second ago, if not as things stand, and if care doesn't bring anything new with regards to what we were talking about a second ago to help first-time buyers, it'll be the first time in how many years that there hasn't been some sort of.
Sarah:I'm pretty sure the help to buy scheme was launched. It was either sort of 2010,. 2012, something like that. So it'll be like at least 12 years since there's been any sort of scheme or discount for a first-time buyer.
Dr James:So, if history's anything to go by, it certainly sounds promising that there's going to be some assistance.
Sarah:I would have thought so because the thing is is first-time buyers are having such a hard time you know deposits, trying to get the deposits together because prices have gone up so much we're in higher rates. Okay, they're not as bad as what they were sort of two years ago, but they're certainly. You know, if you look at the last sort of 10, 15 year average, they're certainly much higher. So the cost of borrowing is much more. There's nothing, there's not really anything on the good news side for first time buyers at the moment.
Dr James:They need something to cheer about. Well, you know what. Watch this space. And actually, Sarah, this is my formal invitation to you right here, right now. Why don't we go ahead and book in a podcast for immediately after the budget, or maybe a few days afterwards, so you can have time to process the ramifications of it? Then we can get that out to the airwaves very soon in the meantime. So if anybody wants to reach out to you off the back what you said today, how are the best off doing that?
Sarah:uh, just um. Um, we've got our website, sarah-grace. co. uk, or phone us 0208 633 3888.
