Martin Lewis issues new warning to homebuyers as stamp duty is cut

9 July 2020, 11:45 | Updated: 9 July 2020, 11:47

Martin Lewis has issued a warning to homebuyers
Martin Lewis has issued a warning to homebuyers. Picture: ITV/PA Images

Martin Lewis has said it won't necessarily be any easier to buy a house.

Money Saving Expert Martin Lewis has put out a warning after stamp duty was temporarily cut this week.

On Wednesday, Chancellor Rishi Sunak announced that no stamp duty would be paid on houses worth up to £500,000 in England and Northern Ireland.

But appearing on This Morning, cash-saving guru Martin said that this doesn’t necessarily mean it will be easier for families to move house.

Speaking to Holly Willoughby and Phillip Schofield said: “Yes it will kick start house buying, but getting a deposit won’t be any easier.

Martin Lewis appeared on This Morning
Martin Lewis appeared on This Morning. Picture: ITV

“You need much more deposit than you ever have before, you need 10 or even 15 per cent to even speak to a mortgage broker.”

Read More: Martin Lewis issues interest rate warning on mortgage payment holidays

Martin went on to say that those with little equity in their homes could struggle even more, as he continued: “If you haven’t got much equity in a house, so you own less than 10% of the house you’re in, you can struggle to get a new mortgage.”

In a message on Twitter, the financial expert also added that things are getting tougher, as he told his followers: "The stamp duty cut will help many, but not first time buyers with sub 10% deposits who simply will struggle to get mortgages."

However, for those that are lucky enough to have a deposit, the savings expert added that rates are very cheap and so are mortgages, so now could be the time to move home.

This comes after Rishi Sunak revealed plans to boost the struggling housing market.

The temporary six-month increase in the stamp duty threshold means that the threshold has leaped from £125,000 to £500,000.

Typically, no stamp duty is paid on the first £125,000 of homes, while 2% is paid of the value between £125,001 and £250,000, 5% between £250,001 and £925,000, 10% on £925,001-£1.5m, and 12% on any value above £1.5m.

But the change could encourage more homeowners to move with huge potential savings.

Martin explained: “The biggest gain is for people buying bigger properties.

“If you’ve bought a home for £600,000, the stamp would have been paying around £20,000, now you’ll be paying just £5000 - which is a £15,000 benefit.”

Read More: What is a stamp duty holiday and how would it work?