When researching the state of the market this week it occurred to me that the current situation is very difficult for first-time buyers compared to investors.
The stamp duty holiday was a rare occurrence of the government throwing a bone to investors, given that landlords have faced higher taxes in recent years.
And, despite previous measures like the 3% stamp duty surcharge (which landlords still need to pay), investors have responded positively to the latest change.
I thought the most striking research on the subject was the news that 43% of young investors plan to buy after the stamp duty holiday was introduced – which suggests the younger cohort of landlords are less perturbed by previous changes designed to dampen down the market and are willing to be decisive to take advantage of the holiday.
For first-time buyers however they were already given stamp duty relief in 2017 – it was abolished on purchases up to £300,000, with a 5% rate applying between £300,000 and £500,000.
Therefore, especially when you consider they tend to buy on the cheaper end of the market, the stamp duty holiday will make less of a difference for them.
Meanwhile high LTV mortgages are now far harder to come by than in recent years.
Indeed, HSBC withdrew its mortgage products above 85% LTV last week due to high demand – so first-time buyers are being asked to come up with bigger deposits.
And that’s not to mention house price inflation, which is likely to rise in the months ahead after years of increases. September Halifax data shows that property prices for first-time buyers in the UK have increased by 69% in the past decade, with the average price rising from £142,473 in 2010 to £241,025.
With this in mind, it seems investors are more likely to be competing with second and third steppers than first-time buyers in the current market.
For a society that talks up the aspiration of owning a house this has to be a concern.
Ryan Bembridge, Editor, PropertyWire
