Stamp Duty Change in November has immediate impact on First Time Buyers
Although December is normally anticipated by many to be a quiet month in the lead up to the holidays, the entry level of the market saw an unexpected boost at the end of November with the introduction of the Stamp Duty (SDLT) incentive for First Time Buyers by the Chancellor.
At the time, it was suggested that, far from assisting First Time Buyers to get on the ladder, this might actually benefit vendors by giving them the opportunity to ‘push’ pricing when coming to the market due to first time buyer demand, with RICS predicting that prices at the entry level of the market could rise in response to the new measures. Additional recent commentary from RICS also suggests that outside of London, many Surveyors believe that the savings will have a limited impact on affordability for First Time Buyers. If this is proven to be the case, it’s possible to suggest then that it will be sellers who will be the main beneficiaries.
Collating the data after the first month of the scheme being operative, albeit at this early stage, we would suggest that the impact highlights the diverging markets of the UK, with some areas showing noticeable increases in the prices paid by First Time Buyers in December. Of course, whether this reaction is just temporary or the start of a longer-term trend remains to be seen.
- Average first time buyer price increased month on month by 11.25% in the North West, 3.58% in the West Midlands and 2.02% in the East of England in December.
- UK average purchase price in December remained steady at £248,637 which was only marginally higher than November (£248,202).
Mortgage Advice Bureau data is based upon mortgage applications therefore this provides a reliable indicator in terms of consumer activity.
