Commenting on the announcement, NAEA Propertymark Chief Executive, Mark Hayward, said: “When the Government announced a stamp duty holiday for first-time buyers in last year’s Autumn Budget, we said that it was a sticking plaster which did not tackle the wider problem of rising house prices, lack of affordable housing and supply of suitable homes in the UK. Today’s news that this relief is being extended retrospectively to include first-time buyers in shared ownership properties is unlikely to have any material impact. Our data shows that so far in 2018, 26 per cent of property transactions involved first-time buyers. This was the same figure as that for the whole of 2017, showing that it hasn’t had a real impact so far, and therefore is unlikely to make a real difference moving forwards. Instead of focusing solely on those buying their first home, the Government needs to look at the whole system to ensure it’s working effectively for all buyers, and there are suitable homes for everyone.”
Whilst no reference was made to Help to Buy during the address, a statement afterwards by the Home Builders Federation suggested that the flagship equity loan scheme which was due to come to an end in 2021, will now be extended to run until 2023, but for first time buyers only.
First-time buyers using Help to Buy are paying almost 10 per cent more for their properties than people buying new builds without the scheme.*
Help-to-Buy purchasers paid an average of £278,00 over the past year for their new builds compared to £257,000 for those who did not. This is in addition to a 16 per cent premium for new builds over equivalent second hand homes.
The figures, collected from more than 70,000 first-time buyers, will raise fears that taxpayer cash pouring into the housing market under the Help to Buy scheme is creating a bubble that risks leaving a generation of homeowners stuck in negative equity.
*Source : The Times