Belfast Telegraph

Thursday 31 July 2014

Stamp duty move has failed to boost buying

The Government's stamp duty exemption for first-time buyers has failed to boost the number of people hoping to get on to the property ladder, a survey showed today.

Only 26.3% of people planning to buy a property during the coming 12 months are first-time buyers, according to property website Rightmove.

The figure is just 0.5% higher than when the same survey was done in January, despite the latest research being carried out two weeks after the Government announced that it was suspending stamp duty for two years for first-time buyers purchasing a property costing up to £250,000.

The group warned that the figure also fell well short of the 40% of buyers it is thought should be first-time buyers in order to have a healthy housing market.

Miles Shipside, commercial director of Rightmove, said: "A rise of just half a percent on the past quarter falls a long way short of the desired impetus many were hoping the new stamp duty threshold could bring.

"First-time buyers are vital at the foot of the property market food chain, but these results suggest this area of the market has been left malnourished by the recession and restrictive lending.

"This survey of first-time buyer intent is an early indication that we are unlikely to see any significant growth in their numbers over the next 12 months."

London has the highest proportion of potential buyers who will be purchasing their first home at 43.3%, more than double the 20.9% in the South West and well up on Wales's 22.4%.

Around 54% of first-time buyers think it is a good time to purchase a property, while 52% expect prices to be higher in 12 months.

The news came a day after figures showed annual house price rises broke into double digits for the first time in nearly three years during April.

The average cost of a UK home is now 10.5% higher than it was in April 2009 at £167,802, the first time annual growth has reached double figures since June 2007, according to Nationwide.

But despite prices rising by a strong 1% during April itself, economists warned that the 10.5% figure may be the "high watermark" for house price inflation during 2010.

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