Stamp duty cut is helping first time buyers but agents call for more to be done
The decision by British Chancellor Philip Hammond to remove stamp duty for most first time buyers in his Budget Statement last autumn is starting to have an impact with sales rising, new research shows.
Overall, sales to first time buyers increased from 27% in January to 29% in February, according to the latest monthly report from the National Association of Estate Agents (NAEA).
This compares to 22% in 2017 and 24% in 2016, meaning that year on year the number of sales to first time buyers were the best since February 2015.
The NAEA report also shows that the average number of sales agreed per branch rose from seven in January to eight last month, the highest amount since October 2017.
At the same time, the number of prospective house hunters fell by 16% in February from 367 registered per branch to 309, down 28% year on year. In February 2017 agents had 425 house hunters registered per branch.
In line with demand, the number of properties available for sale per branch dropped from 36 in January to 35 in February.
The research also shows that 74% of properties sold for less than the original asking price in February, with only 4% selling for more than the asking price. The rate of properties which sold at asking price stood at 22%, the highest level since June 2016 when 26% of properties went for their asking price.
However, Mark Hayward, NAEA chief executive, warned that while there are signs first time buyers are being encouraged by the stamp duty change more still needs to be done to help people onto the housing ladder.
‘Since the Chancellor cut stamp duty for first time buyers, there have been a good level of sales to the group, but they haven’t rocketed. As we said in last month’s Housing Report, our members have noticed first time buyers holding off on making purchases since the rule was introduced, opting instead to save for longer to maximise the full stamp duty relief,’ he said.
‘This may be one reason why sales are up but not as high as we might expect; the other reason is that the cost of buying is still very high, and first time buyers are still finding it difficult to save for their deposit,’ he pointed out.
‘As the cost of living continues to rise, with consumer price inflation standing at 2.5% in February, we still have a long way to go to make the dream of owning a home accessible to all, but this is definitely a step in the right direction,’ he added.