First-time buyers withdraw as stamp duty threshold reverts
First-time buyers were in short supply during November, according to the National Association of Estate Agents (NAEA).
Figures from the body show only 19% of house sales involved those getting a foot on the property ladder, a substantial drop from a May peak of 45%.
The proportion is also at its lowest since December 2008, when 11% of transactions involved first-time buyers.
The end of the stamp duty holiday on properties costing up to £175,000 will have been an influencing factor, and one that is likely to be around for some time.
In January, the threshold at which the tax becomes due reverts to £125,000 and NAEA president, Gary Smith, comments: “The decline in the first-time buyer segment is exactly what the NAEA anticipated and warned the Government about some months ago.”
He adds: “Any tax holidays result in a distortion in the market and in the case of stamp duty needed to be carefully managed and phased out rather than falling of a cliff.”
Mr Smith also warns of “repercussions” throughout the UK housing sector given that first-time buyers commonly form the foundation of selling chains.
However, the Association has also reported that the number of sales agreed per estate agency remained level in November, at eight.
In addition, the number of homes for sale per branch rose to 58 in November, compared with 57 a month earlier.
Looking to the future, the NAEA expects house prices to remain flat or possibly drop slightly, during the first six months of 2010, before picking up again and remaining stable in the second half of the year.
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