A woman who has saved for years to buy her first home has revealed she now feels forced into panic buying and later regretting it after the Budget failed to extend the tax relief for first-time buyers.
Minreet Kaur, 44, lives in Harlington, west London with her parents Pritpal Kaur, 70 and Rajinder Singh, 77. She is a carer for her mother who has the blood cancer myeloma.
Ms Kaur told i the three of them live in a two-bedroomed terraced house which is too small and cramped for them.
However, following the Budget, extra stamp duty relief for first-time buyers will not be extended beyond April next year leaving Ms Kaur feeling anxious and stressed. She now fears she will end up rushing to buy a house which she will later regret as it wasn’t the right place for her.
Ms Kaur said: “I’m really worried as now the stamp duty is being crunched, it means I’ll be buying in a rush.
“But right now, it feels like the best thing for me to do is to buy whatever I can to take advantage of the current stamp duty threshold as if I end up having to pay stamp duty, or more stamp duty, it will eat into the deposit I have saved so hard for, and it might make it impossible for me to buy at all.
“However, rushing out and quickly buying my first property just to get the stamp duty benefit would be doing it for all the wrong reasons and I might end up having lots of regrets about the purchase.
“It would be like going into a supermarket and picking up something you’ve never bought before quickly and buying it. But buying a property is a huge purchase and it is a big amount of money which I have saved so hard for.”
At present, a first time buyer pays no stamp duty when they buy a home worth up to £425,000. If their home is more expensive, they only pay the tax on the portion above £425,000.
However, this limit, which has been at its current level since 2022, is due to drop back to the old threshold of £300,000 from April 2025.
For those moving homes, stamp duty applies from £250,000 but is also scheduled to revert to £125,000 next year.
Cuts to stamp duty were implemented by the Liz Truss and Kwasi Kwarteng mini Budget in September 2022. However, the last Conservative chancellor Jeremy Hunt announced these would come to an end in April next year.
There was no mention of freezing stamp duty thresholds by Rachel Reeves in the Budget, which means thresholds will increase for homebuyers from the end of March 2025 as planned.
Ms Kaur, who worked in marketing for corporate companies for many years before changing careers to become a journalist in 2018, says her income has reduced a lot in recent years, particularly since she hasn’t been able to take on regular work due to being a carer for her mum.
However, she managed to save a substantial amount during her marketing career and has around £50,000 saved for a deposit for her first home. But as she lives in west London and is looking for properties in the London area so she can be near her elderly parents to support them, she says her choices are restricted and she doesn’t want her hard saved deposit money swallowed up by stamp duty.
“In London, for someone like me who can’t really move further out, even the stamp duty threshold of £425,000 for a first-time buyer is pretty rubbish,” she said.
“But when that threshold drops, I have no idea what I will do so I feel under pressure to make a rush decision to buy something now, even though it might not be the right house for me.”
The house Ms Kaur is living in currently is her parent’s home which they have lived in since 1977. Until 2000 when her brother moved out, there were four of them living there and she says space is a real issue and the property desperately needs a lot of work and money spending on it.
“We are all on top of each other and there’s not enough space and that has been the case for years. I have been saying for years that I need to buy my own place, but it is such a difficult and complex thing for a solo carer to do, particularly with property prices and mortgage rates being so high.
“My mum and dad’s house is now at the stage where it needs so much work doing to it. It isn’t fit for purpose, especially with my mum’s health.
“Even at the £425,000 threshold, the stamp duty does not work for people in London as property prices are so high here. It is forcing people to move elsewhere just so they can get that benefit. However, for me, moving away to a different area is not an option as it is where my mum and dad live and they have lived here for many years and are elderly and don’t want to be uprooted.
“I need to be near them or have them live with me so I can support them and take my mum to all her hospital appointments.
“My parents would be isolated if I left them to move somewhere completely different.”
Ms Kaur says if she looked for a property for £425,000, it would be smaller than where she lives with her parents now. She says to buy a three bedroom property in the area with a bit more space, she would be looking at around £550,000 to £600,000.
“I need to buy a bigger place so I can have my parents move in with me at some point and sell where they are living now,” she explained. “I am not just going to leave my parents in that house because it needs money spending on it to do it up.
“How can any Government, when we’re already in a crisis with first time buyers struggling to buy a property, push them to make a decision which they might end up regretting later down the line?
“It is so unfair and frustrating and I feel so stressed and panicked about it all. I am disappointed by the Budget.”