Case Study
First-Time Buyers
Reducing Stamp Duty
Client Profile
Miss H and Mr T were looking to purchase their first home together after almost four years in rented accommodation.
While Miss H was a first-time buyer, Mr T owned a residential property overseas that was being let, creating additional Stamp Duty Land Tax (SOLT) considerations.
Client Objective
To purchase a leasehold apartment in their preferred location while maintaining affordable monthly payments and minimising unnecessary upfront costs.
The Challenge
The clients identified a property priced at £640,000. However, because Mr T already owned a residential property overseas, a standard joint ownership arrangement would have resulted in a Stamp Duty Land Tax liability of approximately £54,000.
The clients also wanted to ensure that monthly mortgage payments remained affordable and comparable to the rent they were currently paying.
Our Mortgage Advice & Support
Following a full review of the clients' circumstances, we researched suitable mortgage options and identified a Joint Borrower Sole Proprietor mortgage arrangement.
This structure allowed both applicants' incomes to be considered for affordability purposes while only one applicant was named on the property's legal title.
We also introduced the clients to a solicitor experienced in Joint Borrower Sole Proprietor transactions to ensure the legal process progressed smoothly.
The Outcome
The mortgage offer was issued within four working days.
The recommended mortgage structure reduced the clients' Stamp Duty Land Tax liability from £54,000 to £22,000, creating an immediate saving of £32,000.
The funds saved were added to the deposit, enabling access to a lower loan-to-value mortgage product and a more competitive interest rate.
As a result, the clients achieved an additional saving of £10,867 over the initial benefit period when compared with the best available 90% loan-to-value mortgage rate at that time.
Mortgage payments were arranged at a level broadly comparable to the rent they had previously been paying, allowing them to move into homeownership without a significant increase in monthly housing costs.
Key Benefits Delivered
- £32,000 reduction in Stamp Duty Land Tax liability.
- Joint Borrower Sole Proprietor mortgage used to maximise affordability.
- Successful purchase of the clients' chosen property.
- Mortgage offer issued within four working days.
- Increased deposit position through SDLT savings.
- Access to a lower loan-to-value mortgage product.
- More competitive mortgage interest rate secured.
- Additional repayment saving of £10,867 over the initial benefit period.
- Monthly mortgage payments maintained at a level similar to previous rental payments.
- Introduction to a solicitor experienced in Joint Borrower Sole Proprietor transa cti ans.
- Ongoing support throughout the mortgage and property purchase process.
Summary
This case demonstrates how tailored mortgage advice can help clients achieve their homeownership goals while reducing unnecessary costs. By identifying a suitable Joint Borrower Sole Proprietor solution and coordinating with experienced legal professionals, we helped the clients reduce their Stamp Duty liability, strengthen their deposit position, secure a more competitive mortgage and purchase their ideal home.
Like all Inform Mortgages clients, they continue to benefit from our ongoing mortgage review service, helping ensure their mortgage remains appropriate as their circumstances and the mortgage market change.
Rates, savings and tax calculations were accurate at the time the mortgage was arranged. Stamp Duty Land Tax treatment depends on individual circumstances and should always be confirmed with a suitably qualified legal or tax adviser.