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 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.

“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.

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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?