Hammond’s hamstrung budget

22 November 2017
  • Stamp duty relief for first time buyers favours the south

  • Welcome respite for pension savers

  • Pension Lifetime Allowance increases to £1,030,000

  • Junior ISA allowance increases to £4,260

Tom Selby, senior analyst at AJ Bell, comments:

“The lack of any blockbuster Budget announcements for UK savers shows that Chancellor Hammond is hamstrung by a crippling combination of worsening growth forecasts, a weak Government and stalling Brexit negotiations. 

“There is a nod to younger voters with a new railcard to help 26 to 30 year olds with the cost of travel and stamp duty relief for first time buyers.  However, it is debateable whether either of these measures are dramatic enough to win over the section of the electorate that deserted the Tories so spectacularly in the general election.”   

Stamp duty relief for first time buyers favours the south

“The stamp duty relief for first time buyers announced in today’s budget will be a welcome boost to people purchasing their first home but the impact will be felt disproportionately in the south of England. 

“The saving based on the average house price for first time buyers in the UK will be £1,654.  However, this more than doubles in the South East to £3,839 and in London it would be £5,000.  Whereas, in the North, the average house price for first time buyers barely exceeded the previous stamp duty threshold so the benefit for many people will be almost non-existent.

“The average deposit for a first time buyer in the UK is £32,899* so the stamp duty saving of £1,654 will only represent around 5% of their deposit.  Whilst that will help, it is difficult to see how this is going to fundamentally change the affordability of house purchases for first time buyers.”

The table below shows how much first time buyers in different parts of the country will save in stamp duty as a result of the changes announced in today’s budget:


Average first time buyer house price*

Previous stamp duty charge

New stamp duty charge












South East










*Source: Halifax First Time Buyer Review - https://static.halifax.co.uk/assets/pdf/mortgages/pdf/170701-Halifax-first-time-buyer-review_July2017.pdf

Welcome respite for pension savers

“The lack of any changes to the pension rules is a welcome respite for UK savers.  The pension freedoms are still less than three years old and a period of stability to allow them to bed in is an unusually pragmatic decision from a Chancellor who could easily have taken the axe to pension incentives to curb the increasing cost of tax relief to the Exchequer.

“It is particularly pleasing to see the pension Lifetime Allowance left alone for once and to get confirmation that it will increase to £1,030,000 in line with inflation.

“The Junior ISA allowance also gets an inflationary increase to £4,260 but it is disappointing that there are no significant increases to the Lifetime ISA contribution limit which would have combined nicely with the stamp duty relief to provide a real boost for first time buyers.”

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