The expected infusion of first-time buyers into the UK property market following last year’s stamp duty cut has failed to materialise, according to estate agents.
And the majority of property experts do not expect the tax incentive, which was aimed at reinvigorating the housing market, to draw a significant increase in home purchases in the months to come.
The Royal Institution of Chartered Surveyors’ December survey found that 86 per cent of its members reported no increase in first-time buyer inquiries following the stamp duty changes.
Lack of interest: Rics added that the fresh supply of new homes coming to market has been in decline for nearly two years.
Rics said that while this could be in part due to the time of year, it also found little anticipation that the situation would change over the coming months.
Two-thirds (66 per cent) anticipated the stamp duty cut would have little consequence, although 12 per cent did think it would result in higher overall activity.
But Brian Murphy at the Mortgage Advice Bureau noted a ‘split in opinions around the [stamp duty land tax] scheme for First Time Buyers which was introduced in November’.
‘In London, more than double the number of surveyors felt that it would have a beneficial impact on the market than those of outside London,’ he said.
‘Of course, this is reflective of the value of property in the Capital, where those purchasing for the first time can expect to save up to £5,000 under the new scheme.
The Rics December survey found that 86 per cent of its members reported no increase in first-time buyer inquiries following the stamp duty changes.
‘However it will be interesting to see how this plays out in the coming months and whether or not stimulus at entry level will have an impact further up the market, as we observed that mortgage enquiries for First Time Buyers were increased in December across the network, although of course it can take months for this to translate into finalised transactions.’
In November, it was announced that first-time buyers – in England, Wales and Northern Ireland – paying £300,000 or less for a home would pay no stamp duty.
Rics added that the fresh supply of new homes coming to market has 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.
Rics said that the fresh supply of new homes coming to market has been in decline for nearly two years.
Rics found a ‘lack of conviction’ surrounding the near-term outlook for house prices, with surveyors in London feeling the most negative, and the most upbeat results coming from Wales, Northern Ireland and Scotland.
The strongest survey results for current price growth were in Wales, Northern Ireland, North West England and the Midlands.
Rics 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.
Sales expectations nationally remain flat over the coming three months, but surveyors are more optimistic about the year to come with activity anticipated to pick up across all regions and nations in the next 12 months.
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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