TSB announces stamp duty break

New mortgage lender TSB is to deal out a knockout blow to its rivals by paying the stamp duty on properties worth between £125,001 and £250,000.

The offer from the high street bank being spun off from Lloyds Banking Group, will mean that first-time buyers and movers can avoid shelling out 1% of the property’s value – or up to £2,500 on a house or flat costing £250,000.

Stamp duty is one of the biggest concerns for aspiring homeowners, particularly as many of them need all their spare cash to go towards putting down a deposit.
In January 2013 alone, some 40,000 people spent a massive £70 million on stamp duty charges.

And TSB research shows that the average homebuyer spends more than £1,650 on stamp duty, while one in 10 would-be first-time buyers worry about being able to cover such costs.

The new bank has therefore decided to make a splash in the mortgage market by replicating a stamp duty “holiday” introduced on homes worth up to £250,000 by the Labour government in 2009 but has since retracted.

Ian Ramsden, mortgages director at TSB says: “Stamp duty is clearly a significant up-front cost for first-time buyers and movers alike. This offer will enable homebuyers across Britain to spend more on what matters most to them when moving house.”

People in the 1% stamp duty bracket are not the only ones TSB is keen to attract, however. It is offering both customers paying no stamp duty because their homes cost less than £125,000, and those spending more than £250,000, £500 cashback to help with moving costs such as surveys and removal fees.

Many of its deals are also fee-free, cutting the upfront costs faced by cash-strapped borrowers.

This is true, for example, of all its first-time buyer deals (a two-year fixed rate priced at 2.94%, a five-year fix at 4.54% and a two-year tracker with a current rate of 2.84%) and versions of its two and five-years fixes and two-year tracker for homemovers, who pay a higher rate to avoid a £995 fee.

The fixed rate deals are open to anyone with between a 10% and a 25% deposit (apart from the fee-free fixes for movers, which are only available if you can put down at least 15%).

The trackers, meanwhile, are available for buyers with deposits of between 15% and 25%.

When compared with other fees-free mortgages on the market, this makes them a competitive option – especially for those who can take advantage of the stamp duty offer.

While both First Direct and the Post Office offer borrowers with a 25% deposit fee-free, two-year fixes at 2.59%, neither deal is available to those with a smaller deposit, nor comes with stamp duty paid.

This is not the first time a UK bank has offered to pay stamp duty on lower value properties, though. Last year, Lloyds Banking Group-owned Halifax offered to cover the cost of the tax for first-time buyers – but not movers – spending up to £250,000.

Please note: Any rates or deals mentioned in this article were available at the time of writing. Click on a highlighted product and apply direct.

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