First timers' stamp duty cuts won't help in London says ex-Rightmove chief

Rightmove’s former lettings chief Sam Mitchell has taken over as chief executive of online agency HouseSimple, which recently won another £20m in investment.

Mitchell’s first high-profile statement has been to comment on research from the agency which shows that the government’s scrapping of stamp duty for most first time buyers - a centrepiece of its Budget late last year - is almost entirely meaningless for London. 

HouseSimple says there are just 387 properties currently for sale at £300,000 or less in London travel zones 1 and 2, that would be stamp duty exempt for first- time buyers.

If you extended the search area to include zone 3, the number of stamp duty exempt properties increases to 1,235. 

Not surprisingly, the Royal Borough of Kensington and Chelsea has the fewest stamp duty exempt properties, with just six, including a tiny 113 square foot studio flat, in SW5, Earls Court. 

The boroughs of Camden and City of Westminster, each have just 18 stamp duty exempt properties currently on the market.

By contrast if first time buyers head to the borough of Croydon, in travel zones 5 and 6, they will find the largest number of stamp duty exempt properties on the market anywhere in the capital - 795 properties at £300k or less, more than double the number in any other London borough.

The reality is, says Mitchell, that most first-time buyers will still have to pay stamp duty if they’re hoping to buy in inner London. 

According to HouseSimple figures, there are 4,490 properties in zones 1 and 2, and 7,687 properties in zones 1 to 3, that are currently on the market at between £300,001 and £500,000, and would be eligible for a £5,000 stamp duty cut.

“The Chancellor wheeled out his big tax break ... to help first-time buyers and attract young voters. Unfortunately for the young London buyer, the stamp duty cut, while beneficial to large swathes of the country, won’t make much of a dent in their house buying budget” says Mitchell.

“Even a stamp duty saving of £5,000 on properties up to £500,000, which is not something to be sniffed at, won’t be much help if first-time buyers don’t have the funds in the first place to put down substantial deposits needed to buy even a basic starter home in Inner London.

“London is seeing an exodus of young professionals, who would prefer to move to more affordable areas than buy in outer London and face long commutes every day. With the growth of business hubs in many other major cities, and the cost of housing considerably lower than in the capital, London is no longer the economic draw it used to be” he concludes.