THE stamp duty cut for first-time buyers has shown little sign of boosting the housing market.
The December survey from the Royal Institution of Chartered Surveyors (Rics) said 86 per cent of its members reported no increase in first-time buyer inquiries following its scrapping.
Rics said while this could be in part due to the time of year, it also asked for opinions on the likely impact over the coming months – and found that two thirds of agents (66 per cent) thought the changes would have little affect.
But 12 percent did think it would result in higher overall activity.
In the November Budget, chancellor Philip Hammond announced first-time buyers paying £300,000 or less for a home would pay no stamp duty.
Before the move, research from Santander claimed that 146,000 property deals – more than 29,000 a year – had been prevented due to the tax.
But some experts predicted that its scrapping would actually push-up prices for first-time buyers instead.
Rics said the fresh supply of new homes coming to market has also been in decline for nearly two years – with December seeing a 23-month run in which there has been no positive reading.
Average property stock levels on estate agents' books are close to all-time lows, it said.
Scotland, Northern Ireland and North East England were the only regions to see a recent pick-up in sales, while sales remained steady or fell across the rest of the UK.
HOW TO GET HELP BUYING A HOUSE
THERE are several government schemes available to help you get on the housing ladder.
- Help to Buy loan: This scheme is for those who have a 5 per cent deposit, and is only available on new-build properties that are worth less than £600,000. The government lends you up to 20 per cent of the property value (interest-free for the first five years) which gives you access to cheaper mortgages. You will need to pay this back at the end of the mortgage or when you sell.
- Starter Homes: First-time buyers under the age of 40 can access this new scheme. You’ll get a 20 per cent discount on the market value of the property (new-build only) but you cannot sell or let the property for five years after you buy it.
- Shared ownership: This scheme is available to non-homeowners who earn £80,000 a year or less (£90,000 in London). People can buy a share of a home from a housing association and continue to rent the remainder. Buyers will need a ten per cent deposit as well as money to cover stamp duty and other fees. You’ll also need to find a mortgage lender that is willing to lend on shared ownership properties
Simon Rubinsohn, Rics chief economist, said: "The initial feedback from the market doesn't suggest that the change in the stamp duty regime announced in the Budget is going to have a material impact on activity.
"Indeed, the risk was always that a good portion of the benefit would be capitalised in the price, therefore limiting the benefit for the first-time buyer."
A Treasury spokeswoman said: "We want to restore the dream of homeownership for a new generation.
"Over the next five years, our stamp duty cut will help over a million first-time buyers getting onto the housing ladder, with an estimated 16,000 first-time buyer purchases alone since the changes took effect in November."
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Getting on the property ladder is proving increasingly difficult for Brits looking to buy.
Research from mortgage brokers L&C Mortgages found that the average deposit now stands at an eye-watering £51,000.
And it predicts that the cost will continue to soar over the next decade, rising to a whopping £81,468 – a jump of 60 per cent.
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