The latest National Association of Estate Agents (NAEA) report suggests that some first-time buyers, particularly in areas outside of London are pushing themselves further financially to maximise the benefit of stamp duty relief.
NAEA suggest that they are skipping the traditional first home and making the jump straight up the ladder to what would previously have been their second purchase, thus also saving on future stamp duty costs.
We analysed all sales that have completed since stamp duty relief for first-time buyers was introduced on 22nd November 2017. We then compared the price paid for one and two bedroom homes against the average reported price paid by first time buyers in each region.
This is a very clever move by first-time buyers but if it becomes widespread, pressure is likely to intensify on next step of the ladder which will make it harder for the ‘second-steppers’ who wish to move up the ladder out of their first home.
In parts of the country the average price paid by first-time buyers is closer to the cost of a two bedroom property than a one bedroom one. This suggests that first-time buyers are very much are jumping the first step on the ladder in some places. We will revisit this analysis in a few months to see the impact it might have on the lower rungs of the property ladder.
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