The stamp duty concession for first-time buyers announced inside the Budget will have a “limited impact” on housing demand, a lender has said.
Stamp duty has been abolished when buying a first home up to a value of £300,000 in England, Northern Ireland as well as temporarily, at least, in Wales.
For properties costing up to £500,000, no stamp duty will be paid on the first £300,000.
The Nationwide said many buyers had already paid little or none of the tax.
Many properties – primarily outside of East Anglia, as well as the South East as well as South West of England – were being sold below the previous threshold of £125,000, the lender said.
“The decision inside the Budget to abolish stamp duty for first-time buyers … will be likely to have only a modest impact on overall demand,” said Robert Gardner, Nationwide’s chief economist.
“The potential savings are more substantial for borrowers where house prices are higher, especially in London as well as the South East.”
The Office for Budget Responsibility said last week some of the benefit might be passed on to existing home owners through higher house prices, although the movement might be quite smaller.
However, the Nationwide noted in which, for example, inside the South West of England, 93% of first-time buyers had been paying an average of £2,399 in stamp duty.
This particular proportion might fall to 11% typically paying £531.
Scotland has an independent system of land tax. Stamp duty will be devolved to Wales via March 2018.
The Nationwide, the UK’s biggest building society, said in which UK house prices rose by 2.5% inside the year to the end of November.
The figure, which will be drawn via the lender’s own mortgage data, was unchanged via the previous month.
Prices rose by 0.1% in November compared with October, with the average UK home valued at £209,988. A lack of supply has maintained house cost growth in recent times.
“There will be still a lot in which remains to be done in tackling the UK’s housing supply issues. with This particular reason, the focus inside the Budget on increasing supply of homes inside the year ahead was encouraging,” Mr Gardner said.