Estate agents say stamp duty holiday has sparked demand – but mortgage drought may shut out first-time buyers
Estate agents are gearing up for a sales bonanza during the stamp duty holiday – but experts have warned a mortgage drought risks shutting out first-time buyers.
Enquiries from house hunters have surged since Chancellor Rishi Sunak announced the nine-month tax cut in his mini-Budget summer statement on Wednesday.
The change means buyers will pay no stamp duty when purchasing properties worth less than £500,000 – representing most of the market – up from a previous threshold of £125,000.
Enquiries from house hunters have surged since Chancellor Rishi Sunak announced the nine-month tax stamp duty cut in his mini-Budget summer statement on Wednesday
But there are fears the recovery could be hampered if first-time buyers cannot secure mortgages from cautious lenders.
Eleanor Williams, finance expert at Moneyfacts, said: ‘Borrowers who have little deposit or equity could struggle to find a suitable mortgage deal at this time.’
High Street banks including HSBC and Nationwide have withdrawn mortgages that require smaller deposits during the pandemic, effectively shutting out younger families who cannot afford to pay bigger sums of cash up front.
Despite this, estate agents have seen huge interest from younger buyers since the stamp duty holiday was revealed.
Nick Leeming, chairman of Jackson-Stops, said: ‘Younger buyers in particular have been quick off the blocks, with website traffic increasing from 25-34 year olds by 109 per cent on the week.’
Zoopla also said enquiries were up 29 per cent on Wednesday compared to the daily average of the past month.
And Rightmove recorded its busiest-ever day on Tuesday, receiving 7.7m visits from prospective customers.
But Jeremy Leaf, former chairman of the Royal Institute of Chartered Surveyors, warned: ‘We want to see more first-time buyers encouraged into the market.’