First-time buyers in London and the South East have benefited the most from stamp duty cuts introduced in 2017 but the changes have barely impacted Northerners.
Analysis by reallymoving.com discovered three out of four first-time buyers across England had profited from Government policy exempting those new to the property market from stamp duty on homes under £300,000.
The cuts also meant first-time purchases on homes above this amount and up to £500,000 would only be liable for stamp duty on the first £300,000.
However, despite 75% of buyers making savings from the cuts, most of these people appear to be living in London and the South East, according to reallymoving.com’s research.
House prices
It explained that in areas where house prices are lower, many buyers already fell below the previous stamp duty threshold of £125,000.
This meant in, the South East, 93% of first-time buyers had made savings compared to 39% in the North East.
The analysis revealed the total amount saved between November 2017, when the exemptions came into effect, and November 2018. It found first-time buyers in London took a 28% share of the overall savings, worth around £119 million, and those in the South East took 25% or £106 million.
In the East, first-time buyers took a 14% share, or £62 million, and those in the North East benefited from just 1% of the savings – worth £5 million.
High London house prices have also meant many first-time buyers in London have been priced out of any stamp duty perks. Indeed, over a fifth of first-time buyers in London in the last year spent over £500,000 on their first home – too much to benefit from the changes at all.
Regional caps
Rob Houghton, CEO of reallymoving.com said that while the Government had recognised the impact of regional house price variations when it introduced Help to Buy regional caps in the recent Budget, it continued to apply stamp duty nationally. This meant the tax was a major barrier to thousands buying in higher value locations.
He added: “Consequently, first-time buyers in the south of England still have some serious saving to do to cover the up-front costs of buying their first home, but the majority are paying less than they did under the old system.
“Alongside other schemes such as Help to Buy ISAs and shared ownership, 2018 has been a great year to get on the housing ladder.”
