When stamp duty was cut for first time buyers purchasing property for less than £300,000; the Government claimed that it would help more people to get on to the property ladder. The announcement, which came during the Autumn Budget in November of 2017, was met with a mixed reaction. There were many people who supported the idea but almost immediately, the Office for Budget Responsibility, the OBR, suggested that this change would lead to house prices rising.
The OBR also said that existing property owners would feel more benefit from the decision than first-time buyers. The difference in expectations on the cut means that many people and industry specialists have been closely watching the market for any notable impact. Findings from mortgage approvals for property purchases for March 2018 would suggest that the cut in stamp-duty for first-time buyers is yet to have a positive impact on the market.
The level of mortgage approvals in March fell to a three-month low. In figures provided by the Bank of England, March saw 62,914 mortgage approvals, which was a fall from the 63,871 mortgage approvals from February. The March figure was also below the six-month average, which was recorded as 64,544.
While some people are taking these figures as a sign that the stamp duty cut isn’t working yet, it is important to remember that many factors impact on the property market. When we look back on March of 2018 one of the most notable things will be the weather. The start of the month saw horrendous weather cover large parts of the UK, and this is likely to have impacted on many people’s actions over the month.
Many people were forced to stay home for many days at the start of March and then many of these same people spent the following days dealing with the aftermath of the weather conditions that were dubbed The Beast from The East. Prospective buyers face many challenges when buying property or applying for a mortgage but weather like the kind we endured earlier this year is likely to have deterred even the most intrepid of property buyer.
However, while it is correct to make allowances for a dip in the property market and mortgage approvals for March of this year, there is nothing to indicate that the stamp-duty cut is encouraging first-time buyers to get on the property ladder.
It has regularly been cited that the most pressing issue in the property market is the lack of houses being supplied for sale. If this issue isn’t addressed or improved upon, there is a strong chance that measures like the cut in stamp duty will have negligible impact. There were calls at the time of the Autumn Budget for more money to be diverted towards property development, but the Government decided to cut stamp-duty.
Industry specialists will continue to examine this aspect of the market but on existing evidence, there is not much optimism for stamp duty cuts having a notable impact on the market.
Sellers will be hoping for a pick up in activity from first-time buyers, and indeed, any buyers. However, even in a slow market, there are ways to stand out from the crowd and improve your chances of selling property. If you would like assistance from a property specialist contact Griffin Residential and we will be more than happy to help you sell your home.