Accord Mortgages is launching a unique mortgage range designed to help cover the cost of buying a first home, in particular the increased Stamp Duty Land Tax first-time buyers face from tomorrow.

The new range will offer first-time buyers up to £6,250 cashback which they can use to help offset the increase in stamp duty costs and will be sent to the customer’s solicitor along with the mortgage advance and released for use as soon as the mortgage completes. 

The intermediary-only lender’s analysis shows this level of cashback is enough to help meet the extra Stamp Duty on first homes worth up to £500,000. The lender is concerned that, without help like this, many potential borrowers could face having to delay buying their own home.

Product highlights

• A tiered range of five-year fixed-rate mortgages, starting at 5.19%, available up to 95% loan-to value (LTV), for first-time buyers, with free standard valuation
• Developed with simplicity in mind, cashback is sent to the customer’s solicitor along with the mortgage advance and released for use as soon as the mortgage completes: Cashback ranging from £2,500 on properties valued up to £350,000, with the highest tier paying £6,250 for properties valued up to £500,000
• No Product fee
• Available for purchases of houses and flats – including new builds up to 90% loan-to-value – in England, Wales, Scotland and Northern Ireland.

From tomorrow, the threshold at which first-time buyers in England and Northern Ireland must pay Stamp Duty will reduce from £425,000 to £300,000, meaning anyone buying a property valued over £300,000 will now have to pay stamp duty. 

While buyers of properties in less expensive parts of the country – where the average first-time property is likely to cost closer to £200,000 – will remain exempt; around 23%, in 68 local authority areas across the UK, will be caught in the new £300,000 to £425,000 tax trap, according to recently-released research from the Alexander Hall mortgage brokerage. Overall, 31% of all first-time buyers will now have to pay stamp duty.

Accord managing director Jeremy Duncombe says: “First-time buyers already have enough challenges to overcome in saving up sizable deposits and meeting the affordability challenges caused by increased interest rates and the current high cost of living. We fear that finding thousands more to cover the additional tax burden resulting from the Stamp Duty changes announced in the Government’s Autumn Budget, will be a step too far for many.

“That’s why we’ve decided to launch this innovative new product, with differing amounts of cashback that will be sent to the solicitor on completion to ensure the borrower doesn’t need to find further money up front, to provide a potential solution for aspiring homeowners who need it.”