Stamp duty giveaway overwhelmingly benefits first-time buyers in the South
Analysis found 75% of all first-timer buyers have benefitted from the change since it was introduced in November 2017, but buyers in some parts of the country have gained more than others.
The cut removed all stamp duty for first-time buyers for properties up to £300,000. It also applies to the first £300,000 for properties worth up to £500,000 purchased by first-time buyers.
A charge of 5% is made on the value between £300,000 and £500,000.
Chancellor Philip Hammond extended the relief to first-time buyers of shared ownership properties in the 2018 Budget last month.
HMRC reported that 58,800 buyers had claimed the relief in the third quarter of this year, taking the total number of users to 180,500, saving £426m in total.
However, research by Really Moving found those in London and the South East have reaped far greater savings than those in the North and Midlands, where lower house prices mean some may have not even benefitted at all.
In areas of lower house prices a large proportion of buyers already fell below the previous stamp duty threshold of £125,000, Really Moving noted.
In the South East, 93% of first-time buyers have made savings, compared to 39% in the North East.
Of the total amount saved, first-time buyers in London took a 28% share, worth approximately £119m, followed by the South East at 25% worth £106m, and the East at 14% worth £62m.
Meanwhile, first-timers in the North East enjoyed just 1% of the savings, worth £5m.
Londoners still paying
However, despite this nearly three quarters of those who have benefited from the changes in London are still paying stamp duty on their purchase, albeit reduced.
And more than one in five spent more than £500,000 on their first home, thereby not benefiting at all from the changes.
Reallymoving.com CEO Rob Houghton said the stamp duty giveaway has had little effect in the northern regions, with the impact broadly increasing further south.
“The government recognised the impact of regional house price variations when it introduced Help to Buy regional caps in the recent Budget,” he said.
“Yet stamp duty continues to be applied nationally, remaining a major barrier to thousands who are buying in higher value locations.
“Consequently, first-time buyers in the south of England still have some serious saving to do to cover the up-front costs of buying their first home, but the majority are paying less than they did under the old system.”