First-time buyers in Sheffield have been hit by a 15 per cent property price increase

First-time buyers in Sheffield have been hit by a 15 per cent property price increase due to the stamp duty holiday, research reveals.

By Rob Hollingworth
Thursday, 16th September 2021, 12:52 pm

They were paying an average of £144,895 in July 2020 but the figure rose to £166,292 in June this year. This covers the stamp duty holiday when no tax was charged on properties sold at under £500,000.

The figures show an increase of £21,396, which is 14.77 per cent compared to the average rise of 11.7 per cent in England in research from estate agent comparison site which shows Yorkshire had the second highest increase in the country. At 16.9 per cent, the North West topped the list.

In local authority areas, first time buyers in the Derbyshire Dales – which covers Bakewell and Matlock – were faced with a rise from £224,190 to £263,692, which is 17.62 per cent.

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First time buyers standing outside an estate agent's window.

The highest rise was in Richmondshire, North Yorkshire, where the average price for a first-time buyer was £178,974 in June 2020 but rose to £235,425, an increase of £56,451 or 31.5 per cent.

The stamp duty holiday was introduced as a financial incentive to keep the housing market buoyant during the pandemic and thus galvanising the UK economy.

However, this heightened demand has pushed house prices to an all-time high and the research by GetAgent has revealed that first-time buyers are now facing an even larger obstacle when it comes to securing homeownership.

Founder and CEO of Colby Short said: “There’s no denying that the stamp duty holiday has been a roaring success in terms of fuelling property market demand and keeping the market moving in an otherwise uncertain time.

“However, while many existing homeowners will have benefited from a boost in the value of their home, the reality is that the nation’s first-time buyers are worse off when it comes to taking that first step onto the property ladder.

“Although mortgage costs remain very favourable at present, the sheer increase in property values and the deposit required will see many either forced to save for longer, or priced out of the market completely.”

One area where prices dropped for first time buyers was Kensington and Chelsea, where the average fell from £1.1 million in July 2020 to just over £1 million in July 2021, a decrease of £75,093 or 6.5%.

The Government extended the tax holiday from July 1 until September 30 this year. During this period - which is now coming to an end - home buyers don't have to pay stamp duty on the first £250,000. The rates are:

£0-£250,000 = 0 per cent

£250,001-£925,000 = 5 per cent

£925,001-£1,500,000 = 10 per cent

£1,500,000+ = 12 per cent

From October 1, 2021, rates will return to pre-Covid levels. That means the point you to start paying stamp duty will be £125,001:

£0-£125,000 = 0 per cent

£125,001-£250,000 = 2 per cent

£250,001-£925,000 = 5 per cent

£925,001-£1,500,000 = 10 per cent

£1,500,001+ = 12 per cent

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