"The strong bounce in demand seen at the start of the year has been further boosted by increased numbers of first-time buyers active in the market."
Its research shows that nearly 750,000 homebuyers in England are set to benefit from the stamp duty holiday, collectively saving almost £5bn.
Of that figure, 600,000 buyers who agreed a sale from May 2020 onwards will not pay any stamp duty as a result of the holiday, saving an average of £4,660 each or £2.8bn collectively.
A further 140,500 people buying homes costing more than £500,000 will benefit from a reduction in the amount of stamp duty they pay - saving £15,000 each or £2.1bn in total.
2021 has recorded its strongest start to the year since 2015, and the looming stamp duty deadline does not appear to be holding back new entrants to the market, with demand up 12.4% on last year.
Sales agreed are also 10.1% higher year on year; however, some sellers are continuing to hold back because of lockdown and coronavirus risk, with total stock levels down 13.8% compared to 12 months prior. New stock remains 14.5% below 2020 levels, pushing house prices up to 4.3% growth year on year - matching the highest level of growth since 2017.
Additionally, first-time buyers are returning to the market after the pandemic, coupled with the rapidly shrinking range of high LTV mortgage products, squeezed their purchasing ability in 2020.
The market share of first-time buyer sales reached its lowest level since 2016 last year, accounting for 31% of sales, down from 35% in 2018.
However, Zoopla has recorded a 5% rise in first-time buyer demand in the first six weeks of the year compared to Q4 2020.
In addition, sales agreed for properties priced between £100,000 and £150,000, a sector of the market where first-time buyers are typically more active, have risen by 26% from Q4 2020.
Analysis suggests that first-time buyer activity has been boosted by a gradual return of higher LTV mortgages and the ongoing benefit of stamp duty relief that will extend beyond 31st March.
Gráinne Gilmore, head of research at Zoopla, commented: “The strong bounce in demand seen at the start of the year has been further boosted by increased numbers of first-time buyers active in the market. Many of these buyers will be taking advantage of the increased number of home loans now available for purchasers with smaller deposits, and most will be less concerned about the ending of the stamp duty holiday on March 31st.
“First-time buyers have no property to sell, so their increased activity in the market is further pushing up buyer demand ahead of supply. As the growth in demand continues to outstrip the supply of homes, it puts more upwards pressure on prices. We can see this in the 4.3% average price growth in the year to January, matching the highest level of growth seen in nearly four years.
“One area of the market where there is more supply coming to the market is among landlords who are bringing their investment properties forward for sale. The share of homes listed for sale which were previously rented has risen in nearly every region during 2020, as landlords reassess their portfolios in light of current rental trends, or ahead of possible tax changes for investment property. While the homes for sale account for a very small proportion (less than 1%) of rented stock, it is a noticeable trend emerging in the market.”
