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How much are stamp duty cuts helping first-time buyers in London?

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22nd Jan 18 10:13 am

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The stamp duty cut for first-time buyers was the Government’s big giveaway in last year’s Autumn Budget. But how much help will it really give buyers in London? 

For aspirational young buyers who dream of living in the heart of London (Travel Zones 1-2), the stamp duty cut will benefit very few first-time buyers. According to analysis by online estate agents HouseSimple.com, there are just 387 properties currently for sale at £300,000 or less in London Travel Zones 1 and 2, that would be stamp duty exempt for first- time buyers. 

If you extended the search area to include Travel Zone 3, the number of stamp duty exempt properties increases to 1,235. Not surprisingly, the Royal Borough of Kensington and Chelsea has the fewest stamp duty exempt properties, with just six, including a tiny 113 square foot studio flat, in SW5, Earls Court. The boroughs of Camden and City of Westminster, both have just 18 stamp duty exempt properties currently on the market.

First time buyers should head to the borough of Croydon, which is travel zone 5-6, for the largest number of stamp duty exempt properties on the market today. Croydon has 795 properties at £300k or less, more than double the number in any other London borough.

The reality is, that most first-time buyers will still have to pay stamp duty if they’re hoping to buy in inner London. According to HouseSimple figures, there are 4,490 properties in Zone 1-2, and 7,687 properties in Zone 1-3, that are currently on the market at between £300,001 and £500,000, and would be eligible for a £5,000 stamp duty cut.

The following table shows the number of properties currently for sale in London at £300k and below, and between £300k up to £500k, broken down by borough.

Borough Tube/Travel zone Number of properties for sale at £300,000 or below Number of properties for sale from £300,001 up to £500,000
Barking and Dagenham 4-5 214 233
Barnet 4 260 1,346
Bexley 6+ 213 388
Brent 3-4 292 1,263
Bromley 3-4 300 722
Camden 1-2 18  277
City of Westminster 1 18 242
Croydon 5-6 795 1,345
Ealing 3-4 235 1,142
Enfield 4-5 279 680
Greenwich 3 207 486
Hackney 2 23 438
Hammersmith & Fulham 2 24 212
Haringey 3-4 85 449
Harrow 4-6 175 589
Havering 6 275 665
Hillingdon 5-6 311 706
Hounslow 2-4 263 660
Islington 1-2 16 381
Kensington and Chelsea 1-2 6 144
Kingston upon Thames 3-4 85 449
Lambeth 1-2 123 851
Lewisham 2-3 231 721
Merton 3-4 197 540
Newham 2-3 260 1,019
Redbridge 4 242 515
Richmond upon Thames 3-4 56 343
Southwark 1-2 89 688
Sutton 4-5 319 390
Tower Hamlets 1-2 70 1,257
Waltham Forest 3-4 175 567
Wandsworth 2-3 94 797
TOTA   5,961 20,488

Sam Mitchell, CEO, online estate agents HouseSimple.com comments: “The Chancellor wheeled out his big tax break offering last Autumn to help first-time buyers and attract young voters. Unfortunately for the young London buyer, the stamp duty cut, while beneficial to large swathes of the country, won’t make much of a dent in their house buying budget. 

“Even a stamp duty saving of £5,000 on properties up to £500,000, which is not something to be sniffed at, won’t be much help if first-time buyers don’t have the funds in the first place to put down substantial deposits needed to buy even a basic starter home in Inner London. 

“London is seeing an exodus of young professionals, who would prefer to move to more affordable areas of the country, than buy in outer London, and face long commutes every day. With the growth of business hubs in many other major cities, and the cost of housing considerably lower than in the capital, London is no longer the economic draw it used to be.”

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