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Leeds Building Society only accepts mortgage applications from intermediaries where they are providing an advised sales service, with the exception of Buy to Let & Holiday Let applications. It is the responsibility of the intermediary to ensure that all applicable law including, without limitation, the Financial Conduct Authority rules on advised mortgage sales are complied with including, without limitation, the provision of adequate explanations.

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Leeds Building Society welcomes Stamp Duty cut for shared ownership first time buyers

The Budget’s Stamp Duty cut for shared ownership first time buyers has been welcomed by Leeds Building Society.

Shared ownership enables purchasers to buy a share of up to 75% of a property, reducing the size of the deposit they will need.

In yesterday’s Budget, Philip Hammond abolished Stamp Duty for first time buyers of shared ownership properties worth £500,000 or less.

“As a leading provider of shared ownership mortgages, we’re pleased to see the Stamp Duty cut, which will help thousands more first time buyers step on to the housing ladder sooner,” said Jaedon Green, Director of Product and Distribution at Leeds Building Society.

“Backdating this benefit to the last Budget is a bold move which corrects the previous Stamp Duty anomaly between shared ownership and other first time buyers.

“Shared ownership has been around for almost 40 years but many people remain unaware of it, or misunderstand how it works, so we hope the Chancellor’s action will draw more attention to what is becoming the fourth mainstream housing tenure in the UK.

“Some people still think shared ownership is only for key workers in London and the South East but purchasers don’t all fit in one mould - this market is strong, healthy and growing across the UK and offers a way to help more people to have the home they want.”

Shared ownership purchasers can choose to pay Stamp Duty at the time of purchase, either:

  • based on the value of their initial share (with additional Stamp Duty potentially due when staircasing); or
  • based on the whole market value.

Yesterday’s change means more purchasers will benefit from choosing the latter option and if their property is worth £500,000 or less their Stamp Duty liability will be zero.

Potential Stamp Duty savings for shared ownership buyers (assumptions based on Stamp Duty calculated on a ‘market value election’ basis):

Kelly McCabe, Managing Director at TMP The Mortgage People, said: “The Stamp Duty announcement yesterday is a welcome one, and long overdue.

“Shared Ownership has become a crucial tenure for so many and having their needs recognised alongside all other first time buyers shows the Government is committed to affordable housing and helping first time buyers achieve homeownership in a more affordable way.

“Shared Ownership is a national scheme that works for people in a variety of situations. It’s not just for first time buyers but the Stamp Duty changes will go a long way to helping people get their first step on the ladder.”

Shared ownership offers flexibility and certainty – customers buy a share of between 25% and 75% and pay rent (outlined in their lease with increases typically capped at a maximum of RPI +0.5%) on the remaining unowned element.

Purchasers benefit from the HPI growth on their share (although in line with other forms of home ownership they can be exposed to any fall in property values). Through staircasing, they can buy a greater share over time, reducing the amount of rent they pay, and potentially own 100% of the property.

The scheme helps improve access to housing through a lower mortgage deposit requirement, as customers only pay a deposit on the share they own. As it’s often cheaper than the private rental sector, a broader range of people can benefit.

Any household earning less than £80,000 per annum (£90,000 in London) is eligible to buy a shared ownership property.

To discuss a new case with one of our mortgage development team, mortgage introducers should go to www.leedsintroducer.co.uk to find details of their nearest Business Developer contact.

Leeds Building Society won the title of Best Shared Ownership Mortgage Lender in the 2018 What Mortgage Awards, its third consecutive year of success in this category.

Leeds Building Society operates throughout the UK and in Gibraltar and has assets of £19.5bn at 30 June (£17.3bn at 30 June 2017). The Society’s head office has been based in the centre of Leeds since 1886.