Philip Hammond, Chancellor of the Exchequer has announced the removal of SDLT (Stamp Duty) on all sales to first time buyers under £300,000 in his autumn statement. This is clearly great news for first time buyers, especially those paying the full £300,000, who pocket a tidy £5,000 towards their new home.
More realistically, the saving made by the average first time buyer, who typically pays around £163,000, is just £760.
However, while this support for first time buyers is admirable in theory, any experienced estate agent will tell you that this move is likely to have little effect on transaction volumes and is actually likely to be inflationary – not what the government had in mind at all!
The reason is that if you put money back into the hands of the buyer, then they have more to spend on a property, as do other first time buyers competing with them. In a market where good first homes get snapped up in days, this can only add to the pressure of demand and hence price inflation.
So if you are selling, or thinking of selling a property suitable for first time buyers (nb: don’t wait till Spring as we predict the supply/demand balance might by then have shifted back to the buyer), you might find that there are more buyers around and they have more money to spend. For example, a buyer for a £200,000 property can now afford to pay an extra £1,500 post-budget.
It’s not every day the Chancellor helps estate agents negotiate great terms for their sellers, so thanks Mr Hammond!
Neil Newstead FARLA MNAEA MIRPM
Chief Executive Officer