Southampton (88%), Norwich (87%), Bristol (87%) and Plymouth (80%) have the largest proportions of property sales between £125,000 and £500,000, which is where there is a saving of stamp duty to be made, L&C Mortgages has found.
Southampton (88%), Norwich (87%), Bristol (87%) and Plymouth (80%) have the largest proportions of property sales between £125,000 and £500,000, which is where there is a saving of stamp duty to be made, L&C Mortgages has found.
This follows the stamp duty cut for first-time buyers on the first £300,000 of any home that costs up to £500,000.
L&C’sStamp Duty Report has found London has a relatively low proportion of properties within the band eligible for a cut (57%), primarily because just over two fifths (43%) of sales are over £500,000 and therefore not applicable for the stamp duty cut.
David Hollingworth, associate director, communications, 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.
“As a priority the government needs to ensure that there is a plan in place to review SDLT relief bands, to guarantee sustained support for would-be homeowners now and in the future.
“Going even further, abolishing stamp duty for first-time buyers altogether would help all those looking to get on the ladder, with one less expense to worry about.
“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.”
Out of 100,000 recent property sales in line to benefit from stamp duty relief, 30,000 will drop out of the bracket to be eligible for a stamp duty tax break in the next decade.
London in particular will be hit by further price rises. In 10 years, over half (51%) of the 52,002 properties that currently qualify for a stamp duty cut for a first-time buyer will not benefit. The total proportion of properties that would benefit from the stamp duty cut will drop from 57% to 28%.
Another example is in Brighton where almost a third (30%) of properties thatarecurrently be eligible to pay less stamp duty are forecast not to do so in10years.
However, Nottingham should have the most houses within the price bracket for tax exemption over the next10years. The proportion of properties here that could receive a discount from this tax change would rise from 51% to 73%.
As location can influence how the stamp duty changes affect people, some are reviewing the area in which they plan to buy.
A fifth (21%) has changed the area in which they want to buy in order to pay less or no stamp duty, which rises to 37% of Londoners.
On the other hand, only 11% of those in the South West have changed the area they want to move to in light of the recent changes.
Over half (53%) feel that it’s unfair that some areas in England will receive a greater discount than others as a result of the stamp duty changes.
Moreover, two in five (41%) say that moving away from where they currently live is the only option to get more for their money.
Almost a third (31%) of first-time buyers don’t know if the stamp duty abolition will benefit them when they buy their first home.
Hollingworth added:“There’s still some work to be done by the government, and the wider market, to educate first time buyers and address the lack of understanding of the benefit of the stamp duty relief.
“Those looking to get on the ladder have been offered a small light at the end of what is considered to be quite a dark tunnel, but if the government doesn’t work harder to illuminate what is on offer then many won’t even be aware that this help is available.”
