First Time Buyer Stamp Duty Relief Massively Favours South of England

More than three quarters of first time buyers have benefited from the changes to Stamp Duty introduced in 2017, but the biggest savers were in the south of England, research shows. A study carried out by reallymoving.com has looked at first time buyer activity between November 2017, when the scheme was introduced, and November 2018.

First time buyers in London and the South East have achieved far greater savings than those in the Midlands and the North, where house prices are lower and the changes have had less of an impact.

A year ago, the government removed Stamp Duty for first time buyers for purchases up to the value of £300,000, while those buying properties up to £500,000 pay no Stamp Duty on the first £300,000 and 5% on the remaining figure.

Following these new rules, 75% of first time buyers in England have paid no Stamp Duty at all or have paid much less than they otherwise would have under the old system.

HMRC has revealed that 58,800 people claimed first time buyer relief in the third quarter of this year, taking the total number of users since the scheme was introduced to 180,500, cumulatively saving £426 million.

In lower priced areas, mostly outside southern England, a large proportion of properties already fell below the previous Stamp Duty threshold of £125,000. In the South East, 93% of first time buyers have made savings using the first time buyer relief, whereas only 39% made savings in the North East.

Londoners have enjoyed a 28% share (£119m) of the total savings in the first year of the relief, closely followed by the South East at 25% (£106m). The East saved 14% (£62m) of the total, while the North East saved a mere 1% (£5m).

Chief Executive of ReallyMoving, Rob Houghton, says: "The government's stamp duty giveaway for first time buyers has had little effect in the northern regions, with the impact broadly increasing the further south you go.

"The government recognised the impact of regional house price variations when it introduced Help to Buy regional caps in the recent Budget, yet stamp duty continues to be applied nationally, remaining a major barrier to thousands who are buying in higher value locations."