Millions of first time buyers could no longer qualify for stamp duty relief by 2028 due to rising prices putting them beyond the minimum rates, reports say.
According to research from L&C, Around four million homes across England will fall outside the current cut off point that first time buyers start paying the property tax if prices continue to rise at the same level.
The study also suggests that first time buyers are conscious of this and 21% said that they have changed the area they intended to buy in so that they can avoid paying stamp duty which kicks in at £300,000.
Applying previous trends in house prices to the next decade it seems that 30,000 sales that have become exempt from Stamp Duty for first-time buyers, would not be eligible in ten years. London in particular will be hit by further price rises: The total proportion of properties that would benefit from the Stamp Duty cut in the capital will have dropped from 57% to 28% over the next decade.
Elsewhere, 30% of properties in Brighton that currently qualify for the exemption would not do so by 2028.
On the flip side, Nottingham will see the proportion of properties within the Stamp Duty exemption increase from 51% to 73% over the next decade.
David Hollingworth, associate director of communications for L&C, said: “It’s alarming that in cities in the south, so few properties will see any type of benefit from the Stamp Duty changes in ten years’ time.
“As a priority the Government needs to ensure that there is a plan in place to review Stamp Duty relief bands, to guarantee sustained support for would-be home owners now and in the future.
“Going even further, abolishing Stamp Duty for first-time buyers altogether would help all those looking to get on the ladder, with one less expense to worry about.
“Our research shows that many of the first-time buyers, especially those based in southern England, who are set to pay less or nothing, will need to act fast before many of the properties currently eligible fall out of the price bracket that qualifies for the cut.”