In July last year the stamp duty holiday, a tax reduction on property prices, was introduced to the housing market. In July this year the threshold reduced from £500,000 to £250,000 and at the end of this month it will return to the £125,000 threshold.
According to GetAgent.co.uk the stamp duty holiday has increased the price of first-time buyer homes by an average of 11.7% in England in the last year, and up to 31.5% in other parts of the country.
Founder and chief executive officer of GetAgent.co.uk, Colby Short, explains: "However, while many existing homeowners will have benefited from a boost in the value of their home, the reality is that the nation’s first-time buyers are worse off when it comes to taking that first step onto the property ladder."
"Although mortgage costs remain very favourable at present, the sheer increase in property values and the deposit required will see many either forced to save for longer, or priced out of the market completely.”
The average price first-time buyers are paying
The research by GetAgent concludes that before the holiday began the average price of a first-time buyer home was £212,166, but currently, this is £236,982, which is an 11.7% increase of £24,816.
The North West has seen the highest increase, with the average first-time buyer now paying 16.9% more compared to July. Yorkshire & Humber saw a 14.8% increase, the North East had a 13.4% increase, the West Midlands increased by 13%, and East Midlands jumped by 12.9%.
Other parts England that experienced sharp price rises include North Norfolk (23%), North Devon (19%), the Cotswold (18%), and Hastings (18%).
In contrast, the stamp duty holiday caused a price drop of 4.1%, within the City of London (4%), the City of Westminster (3%), and Southwark (1.4%).
Kensington & Chelsea have also seen significant price drops. The average first-time buyer home in these locations cost £1.1 million in July 2020, yet this has seen a 6.5% decrease of £75,093.
Although prices in these areas did decline, they remain largely unaffordable for the average first-time buyer.