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New Year, New Property? How interest rates and the autumn budget impact you.

Towards the end of last year there were a few fiscal announcements that have an impact on home buyers, the first one was the interest rise, and the second one was the budget announcement. But what do they mean for individuals looking to either buy for the first time, or move up the property ladder? With a new year, you may be looking to buy a new property, so we have come up with a brief guide to help you out!

1)    Interest rate rising to 0.5%

For the first time in 10 years, the Bank of England has increased the interest rate from 0.25% to 0.5%, and although this doesn’t sound like a lot, it does have an impact on variable rate mortgages, such as a tracker mortgage and people on one would now find they are paying back slightly more every month. It is also worth noting that this is unlikely to be the last rise, as Mark Carney, Bank of England Governor expects it to reach 1.7% in the next few years.

What does this mean for you?

Average first time buyer in London pays £405,000, using a 20% deposit, an example of the impact of an interest rate on mortgage debt can be shown below*:





Monthly Repayment (25 years)




Difference Per month (from 3%)




Total you’ll pay full term




Difference full term (from 3%)





What can you do about it?

As an estate agent, we’re unable to provide you with specialist financial advice, but we always recommend that you talk to a mortgage advisor like Coreco who will go through all your options with you and help you choose the one that is most appropriate to your current situation, taking into account your future plans.

2)    The Autumn Budget

Stamp Duty 

First time buyers were definitely winners in the Autumn budget as stamp duty has been abolished on properties up to £300,000 and the rate from £300,000 to £500,000 is only 5%. This is a big bonus, as previously first-time purchasers used the same scale as people moving up the property ladder, which means properties were exempt up until £125,000, then it’s a gradual scale up to 12%.

We’ll look at an example based on the same property value above, a house priced at £405,000, which would have the following stamp duty changes:


Pre Autumn 2017 Budget

Post Autumn 2017 Budget

Stamp Duty





- £5,000


A full example of this can be found on HMRC website:

Overall Thoughts

Buying a property is always a big step, with lots of things to consider, but the recent changes definitely seem to favour first time buyers. However, as always, make sure you go and see a mortgage advisor before making any decisions!



*For the full information, please look at Money Saving Expert Mortgage Calculator


New Year, New Property? How interest rates and the autumn budget impact you.

by Indago



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