House buyers looking to buy properties under £175,000 have increased significantly in the last three months as the end to the Stamp Duty holiday looms. Since September, searches on Moneysupermarket for mortgages on properties under £175,000 have increased by 9%.
Since over half of all searches on the website are for properties under £175,000, the end of the Stamp Duty holiday will have a severe impact to the market, with most of these likely to be first-time buyers.
Hannah-Mercedes Skenfield, mortgages channel manager at Moneysupermarket, said it is encouraging to see an increase in homeowners looking for this band of property, but the reality is that most properties are well above the £175,000 price tag.
She explained: “Most buyers looking at this end of the housing market are likely to be first-time purchasers; when the Stamp Duty benchmark is pushed back to £125,000, and factoring in the huge cash deposit required by the banks, stepping on to the housing ladder is going to be an impossible leap for many. “
The house purchase searches also show the other stamp duty valuation bands have increased over the same period. Searches for properties between £175,000 and £250,000 have risen by 13% and those between £250,000 and £500,000 have risen by 14%, highlighting that people are trying to return to the market.
Skenfield concluded: “Our figures show house purchase searches have been on the rise since September. To help this continue, the Government should firstly consider extending the Stamp Duty holiday. Recent news that if the Conservative come into power they will raise the Stamp Duty benchmark to £250,000 to help first-time buyers is excellent news. However, this should be extended to all purchasers.”
