The government’s attempt to kick-start the first-time buyer market by removing Stamp Duty and Land Tax (SDLT) for all but the wealthiest has proved a damp squib in London and the South, surveyors have claimed.
In last November’s Budget Chancellor Phillip Hammond eliminated SDLT for 80% of first time buyers, and cut the duty for 95% of those who pay it.
But the Royal Institute of Chartered Surveyors (RICS) says in its latest property market snapshot that new buyers’ enquiries fell for the eleventh month in succession.
“This would appear to suggest that the government’s attempt to breathe fresh life into the market through eliminating the stamp duty charge for most first-time buyers in the Budget is not having a significant impact on overall demand,” says RICS’ Residential Market Survey for February.
Affordability is the key to demand among first time buyers, the figures show.
The SDLT stimulus appears only to be working in the north of the UK where house prices are more affordable; the number of enquiries to agents from first-steppers increased in Scotland, Northern Ireland, Yorkshire, Humberside and the North, but stalled elsewhere.
RICS also says the number of properties available to sell has continued to drop. The number of homes for sale per estate agent branch has fallen back by a quarter since May last year to an average of 42 properties, all all-time low.
The institute also pours cold water on Theresa May’s plans to reform the planning framework in the UK, suggesting its survey “casts some doubt as to whether this will be sufficient to address the challenge,” says Simon Rubinsohn, RICS Chief Economist (pictured).
“The divergent regional picture is becoming increasingly pronounced with key RICS indicators across huge swathes of the country still showing considerable resilience but data for London, the South East and East Anglia rather more subdued.”
Read the RICS February report in full.