The stamp duty "holiday", now drawing to a close, has seen record numbers of first-time buyers searching for homes. However, there are only four weeks left in which you can save up to £2,500.
After March 24, buyers will pay one per cent tax on properties priced between £125,000 and £250,000 - meaning there is a compelling financial reason for would-be homeowners to act now.
'The deadline applies to completions, not exchange of contracts, so time is of the essence'
Figures out from the National Association of Estate Agents show that 23 per cent of overall sales made last month were to first-time buyers, compared with 21 per cent in December. The current three per cent tax on homes above £250,000 will continue to apply.
For properties priced marginally above this threshold it may be possible to negotiate a price reduction to bring the figure below it and thereby save much more in stamp duty.
Look out for last-minute deals
Developers and housing associations are keen to do deals, fearing buyer interest will wane when the stamp duty waiver ends. The deadline applies to completions, not exchange of contracts, so time is of the essence. Part-buy, part-rent buyers can also benefit.
With shared ownership, buyers have a stamp duty choice. Either they can make a one-off payment based on the whole value of the property or they can pay in stages, with the first payment based on the initial share purchased. If the initial share is worth less than £125,000 they are not required to pay duty. But subsequent shares are bought at market value so potentially more stamp duty could be due.
Mortgage lenders say the stamp duty boon to first-time buyers should not be underestimated. Since the start of the waiver in March 2010, 170,000 first-timers have saved a total £319 million, according to Santander.
Because of the continuing credit crunch and large deposit requirements, "first-time buyers will have to fund stamp duty from their own pocket, so the end of the concession will have a real impact", said Bob Pannell, chief economist at the Council of Mortgage Lenders.
London buyers are hit harder because of the capital's higher prices, says Kush Rawal of Thames Valley Housing Association. "Shared ownership buyers include families purchasing more expensive properties."
This provider has launched new three-bedroom houses at Hurlington Court, part of the attractive 14-acre Queen Mary's Place gated estate in Roehampton. Prices start at £125,000 for a 25 per cent share (full market value £500,000). Call 0844 470 4654 or email email@example.com.
Family houses are also available in Hackney at a scheme called The Terrace. Three-bedroom houses cost from £105,000 for a 30 per cent share (full price, £350,000) through Notting Hill Home Ownership. Priority goes to buyers who live or work in the borough. Call 020 8357 4444.
The Meadows is a 212-home scheme on the edge of Mitcham Common. Prices from £84,000 for a 40 per cent share. Pulse, at Colindale in north-west London, has three-bedroom apartments priced from £129,000 for a 40 per cent share. Both schemes available through Notting Hill Home Ownership (as before).
The Junction, Palmers Green, has apartments built around a secure inner courtyard with children's play area and a communal garden. Prices from £53,125 for a 25 per cent share. Call 0800 068 8990 or visit www.originsales.co.uk.
Family Mosaic housing association has launched Cutler Apartments on New Kent Road, SE1. The minimum 35 per cent share costs £82,250 (full price, £235,000). Call 020 7089 1315. The same provider has schemes coming up in Old Kent Road and at Shooters Hill, near Blackheath.
Stamp duty-free homes in cheaper London locations
Private developers are offering stamp duty-free homes in cheaper locations across London. A new urban village is being built at a former RAF site in West Drayton, which is set to benefit from a new Crossrail station.
The latest phase, called Fortis, has two-bedroom houses priced from £247,500. Weston Homes, the developer, is also selling flats priced from £129,000 at Morello Quarter, Basildon, a town benefiting from a £2 billion regeneration initiative. Call 01279 873333.
Delta, a Barratt scheme in Deptford, has studios priced from £189,500. Call 0844 811 4334.
Regeneration in Croydon town centre is back on track after a development hiatus caused by the credit crunch. Saffron Square is a dashing new 45-storey tower with 719 apartments clad in muted pink and mauve tones. A new public square is part of the scheme. Prices from £182,500. Call Berkeley Homes on 020 8774 9888.