First time buyers 'may be paying more because of stamp duty change'

The Mortgage Advice Bureau says early evidence suggests typical first time buyers are now spending more following the effective scrapping of stamp duty for first timers announced in November’s Budget. 

MAB says some parts of the country are showing “noticeable increases” in the prices paid by first timers. 

For example, average first time buyer prices increased in December by 11.25 per cent in the North West of England, by 3.58 per cent in the West Midlands and by 2.02 per cent in the East of England. 

Mortgage Advice Bureau, which uses data based on mortgage applications, says that elsewhere in the market transaction volumes remained steady in December.

The bureau also observed a slight increase in the average purchase price in December - across the market as a whole, not restricted to first time buyers - which it says is likely to be the result of local factors.

“It’s possible to suggest that these factors are reflective of a market which has withstood political and economic uncertainty over the last 12 months; ongoing Brexit negotiations together with the first interest rate rise in 10 years, as well as the implications of Article 24 beginning to realise its full impact on landlords” it says. 

The latter factor is borne out by bureau data suggesting that the average purchase price of a buy to let property actually fell in the month of December, as well as year on year. 

“Bearing in mind that we’ve seen far fewer discretionary buyers and sellers in the last 12months – which arguably has been one of the key factors leading to the low levels of stock in many areas – as well as a discernible decrease in the amount of landlords adding to their portfolios, one might suggest that the level of growth and transaction volumes for 2017 as a whole represents a stable market underpinned by ongoing consumer demand as we start the new year” concludes the bureau.