Stamp duty changes benefit first-time property buyers
In April 2016, the UK Government introduced a new stamp duty surcharge for people purchasing additional properties. The surcharge was an extra 3% on current stamp duty tax rates, and unsurprisingly, the changes impacted landlords the most, as they tend to purchase second or third properties to add to their buy-to-let portfolio.
While some landlords purchased new properties before the surcharge came into effect, many landlords were put off from buying an additional property due to the new stamp duty charges. As a result, many first-time property buyers benefited from a larger selection of properties to choose from, which has been confirmed by new figures from the National Association of Estate Agents (NAEA).
Light at the end of the tunnel for first-time buyers
The NAEA has released some interesting figures which show that in March, sales to first-time buyers rose 4% compared to February, with 28% of all property sales in March completed by first-time buyers. The NAEA expects sales to first-time buyers to continue increasing over the coming weeks and months as buy-to-let landlords leave the market.
According to the NAEA, around 39% of all estate agents in the UK expect the new stamp duty surcharge to put off buy-to-let landlords and therefore lead to less competition in the property sales market.
In more good news for first-time buyers, it was revealed that the number of properties for sale by each NAEA estate agent member rose by more than 50%, from 35 properties in February to 54 in March. However, demand for properties decreased in March, with an average of 417 house hunters registered with each NAEA estate agent member compared to 463 in February. It is worth noting that demand for housing in February was at a 12 year high, likely because many buy-to-let landlords were looking to purchase properties to beat the new stamp duty charges.
The figures from the NAEA also showed that in March, the member estate agents recorded a decrease in the number of properties selling for more than the asking price – only 7% sold for more, compared to 11% in February.
First-time buyers may still struggle to buy a property
Despite the increased number of properties available to buy, the NAEA has warned that first-time buyers may still struggle to purchase their first home as house prices still remain very high, and there is still a shortage of properties on the market. However, the lack of competition from landlords should see things improve gradually for first-time buyers over the coming weeks and months. The NAEA has issued a call to the government to significantly increase the number of new properties being built to ensure that those who want to get on the property market can.
Are you looking to buy your first home in Cardiff? If so, contact us today. As one the largest estate agencies in Cardiff, we have the knowledge and experience to help you find your dream home in many beautiful areas across Cardiff. To find out more, please gives us a call on 02920 480 490 or email sales@cpshomes.co.uk.
