The removal of stamp duty for first-time buyers purchasing property at less than £300,000 was probably the biggest announcement during the November of 2017 Budget. It was an announcement that caught many people by surprise and it sparked debate as to what impact it would have on the property market. The Government introduced this measure in the hope of helping first-time buyers on to the property ladder, and there was initial support for this action.
However, there was also opposition as to the true impact of the cut. The Office for Budget Responsibility, the OBR, stated they felt this cut would lead to an increase in property prices. Their stance was that rather than assisting first-time buyers, higher property prices would penalise these buyers and would provide the most benefit to existing property owners.
As there are polarising opinions on what the impact of the stamp duty cut will be, there has naturally been a strong level of interest in the property market. Okay, there will always be a strong level of interest in the property market but since this cut was announced, people have been watching the market to see if first-time buyers are stepping onto the property ladder with greater confidence. There hasn’t been much time for the cut to impact on the market, but organisations have been voicing their opinion.
Countrywide is a well-known estate agent in the UK and they were quick to announce their initial feelings about the stamp duty cut. They announced, that for the end of December 2017, they experienced a 10% increase in walk-ins from interested first-time buyers. This increase has been attributed to the stamp duty cut and the company believes that this will be repeated throughout 2018. This is the sort of reaction that Chancellor Phillip Hammond was aiming for and indeed, talking about earlier this year.
Of course, while a rise in interest is good for the market, it doesn’t mean anything by itself. It is only natural that first-time buyers will see the changes introduced at the November Budget and then look to find out more information about their property buying options. A rise in interest is positive news but it will only be of benefit if this interest is followed up with purchases.
There has also been a different opinion stated by the Royal Institution of Chartered Surveyors, or Rics. At the end of 2017, they undertook a survey with their members and 86% stated that for December of 2017, there was no noticeable increase in first-time buyers looking to purchase property. The same survey also showed that 66% of respondents expected that the stamp duty cut would have no impact at all. 12% of respondents said they felt the cut would have a positive impact for first-time buyers looking to purchase property.
The true impact of the stamp duty cut may not be felt for some time. If you want to ensure you are fully informed about the property market, get in touch with Griffin Residential and we will do our best to help you.