George Osborne surprisingly announced a new stamp duty that is set to assist buyers.  The change will make the tax connected to property purchases rise gradually rather than having qualifying levels that push buyers into paying close to double or triple the amount they would pay at the previous level.  For instance, the old system that expired at midnight Wednesday would see a buyer paying £2,500 in stamp duty for a £250,000 home.  However, a buyer purchasing a £275,000 home would pay out £8,250 in stamp duty.

The move is to give a boost to buyers, but some critics believe that the cut in stamp duty will only push house prices upward and shut out more home buyers.  With sellers aware of the reduction in tax cost, it is thought they will push their asking price upward.  Whereas, at the old stamp duty level sellers were aware that at certain levels their asking price could cut out potential buyers that would not want to pay a higher stamp duty.

The housing market had slowed down and mortgage lending for new house purchases had remained in low demand.  The announcement of the change in tax should grab the attention of house shoppers and the savings may make them shift gears from shopping to buying.

It should be noted that the new system will require those with higher priced property purchases to pay more than the old system required.  In that case, those sellers may find that aggressive pricing could assist in gaining them a sale.

As mortgage lending has remained low in demand for house purchases, remortgage lending has remained below the expected level with threats of the cheap remortgage deals soon to disappear.  For months, and as recently as a few weeks ago, lenders have been offering low interest rates with their offerings.  This trend is not expected to stay long on the market as the move was meant to bring in borrowers.  When demand grows, the need for the cheap deals will fade and the deals will be pulled.

Shopping around for a remortgage deal while the good deals are on the table could offer homeowners a substantial savings.