NAEA says first time buyer stamp duty cut working - but more needed

The National Association of Estate Agents says the government’s first time buyer stamp duty incentive “seems to be having the desired effect” - but insists more can be done to boost the market.

The association says the proportion of sales to FTBs rose to 29 per cent in February, from 27 per cent in January; year-on-year the figures for February were the best monthly results for first time buyers in three years. 

Meanwhile across the market as a whole the average number of sales agreed per branch rose from seven in January to eight last month.

However, the number of prospective house-hunters fell by 16 per cent in February – from 367 registered per branch, to 309.

Year-on-year this is down by 28 per cent, as agents had 425 house-hunters registered per branch in February 2017.

In line with demand, the number of properties available for sale per branch dropped from 36 in January to 35 in February.

In terms of prices, some 74 per cent of properties sold for less than the original asking price in February with only four per cent selling for more; properties which sold at asking price stood at 22 per cent – the highest level since June 2016, when 26 per cent of properties went for asking price.

“Since the Chancellor cut stamp duty for first-time buyers, there have been a good level of sales to the group, but they haven’t rocketed. Our members have noticed FTBs holding off on making purchases since the rule was introduced – typically outside of London – opting instead to save for longer to maximise the full stamp duty relief” explains Mark Hayward, the NAEA’s chief executive.

He continues: “This may be one reason sales are up but not as high as we might expect; the other reason is the cost of buying is still very high, and FTBs are still finding it difficult to save for their deposit. As the cost of living continues to rise – with consumer price inflation standing at 2.5 per cent in February – we still have a long way to go to make the dream of owning a home accessible to all, but this is definitely a step in the right direction.”

Meanwhile the NAEA has also praised the Welsh Government for setting its replacement for stamp duty - known as Land Transaction Tax - at a level which the association advocated. 

Mark Hayward says: “We’re pleased that the Welsh Government has listened to our proposals and next week will be introducing new tax bands in Wales; house buyers will really feel the difference of these changes. For buyers at the lower end of the market, the new bandings mean they won’t pay any land transaction on properties worth up to £180,000; this is the value of the average house price in Wales.”