Over half of the 52,002 properties that currently qualify for a stamp duty relief for first-time buyers in London will be priced out of the tax cut in the next ten years, according to mortgage adviser L&C Mortgages.
The company looked at how many homes across England are and will be available for under £500,000 by 2028, and therefore qualify for the Government’s first-time home buyer’s relief.
The research shows that as many as 4m homes across England could move out of the stamp duty relief threshold in the next 10 years due to rising house prices.
In London, the total proportion of properties that would benefit from the stamp duty cut will drop from 57 per cent to 28 per cent by 2028.
The study also found that London has a relatively low proportion of properties within the band eligible for a cut, primarily because just over two fifths of sales are over £500,000 and therefore not applicable for the stamp duty cut.
In Brighton, almost a third (30 per cent) of properties that could currently be eligible to pay less stamp duty are forecast to move above the threshold in ten years.
However, homes in Nottingham are the most likely to remain within the price bracket for tax exemption over the next ten years.
The research also found that Southampton, Norwich, Bristol and Plymouth are currently the best places to buy to avoid stamp duty.
| City | Houses below £500,000 |
|---|---|
| Southampton | 88 per cent |
| Norwich | 87 per cent |
| Bristol | 87 per cent |
| Plymouth | 80 per cent |
| London | 57 per cent |
According to the research, Nottingham will have the most houses within the price bracket for tax exemption over the next ten years.
David Hollingworth from L&C said: “It’s alarming that in cities in the South, so few properties will see any type of benefit from the stamp duty changes in 10 years’ time.
“Our research shows that many of the first-time buyers, especially those based in southern England, who are set to pay less or nothing will need to act fast before many of the properties currently eligible fall out of the price bracket that qualifies for the cut.”
The research also found that almost a third of first-time buyers don’t know if the stamp duty abolition will benefit them when they buy their first home.
However, a fifth of first-time buyers have changed the area in which they want to buy in order to pay less or no stamp duty, which rises to 37 per cent of Londoners.
James Hender, head of private wealth at Saffery Champness, said: “The research shows that people are aware of the stamp duty relief and are changing behaviour to benefit from the savings.
“House price inflation could render this relief meaningless. Although higher stamp duty receipts would be the result, a future Chancellor may wish to raise the thresholds to ensure that first time buyers continue to get a helping hand onto the property ladder.”
Source: City A.M.