Using data taken from the Land Registry, LSL Property Services and Nationwide, the report shows that property price growth in the first time buyer market was over double that of the UK housing market in 2013. First time buyer property prices began to outstrip those of the overall market in April 2013, coinciding with the launch of the Help To Buy equity loan. In November 2013 UK houses prices were 4.9% higher compared with the same period in the 2012, whilst first time buyer properties finished the year 11.4% ahead.
Stamp duty payments will return for over 31,000 first time buyers in 2014, with forecasts indicating the average price of first time buyer properties in the East & West Midlands will hit £126,368 & £131,297. This would mean over 31,000 additional first time buyers will now need to pay Stamp Duty, at an average cost of £1,300 - for those buyers intending on using the Help To Buy scheme, this would increase their required funds by 20%
First time buyers in London, however, suffer a triple burden compared with the rest of the country. Lack of assistance from Help To Buy: Government data shows only 5% of HTB Equity Loan completions occurred in London, whilst the average property price under HTB Mortgage Guarantee is 42% below the average London FTB property price. The 3% Stamp Duty band also adds over £5,500 to the London first time buyer’s expenses, as well as affordability being at a low: the first time buyer property price is now 7.5x earnings, versus 7.2x in Q3 2007
However, we could see a historical first in 2015 - average first time buyer properties in the North will break the 1% Stamp Duty barrier. Market forecasts indicate the average first time buyer property in Yorkshire and the Humber will hit £126,305 in 2015. Never before has the average value of a first time buyer property broken this barrier in the North, and the North West will also be close to the cusp, with the average first time buyer property forecast to cost £124,326.
