Stamp duty relief cut pushes first-time buyers out of the market

First-time buyers are vanishing from the market due to stamp duty changes, according to new data.

Research by Alto reveals a 55% drop in offers from first-time buyers this quarter compared to the same time last year.

In April, the government cut stamp duty relief for first-time buyers, reducing the tax-free threshold from £425,000 to £300,000.

The change means more first-time buyers face paying thousands of pounds more in upfront costs when trying to get on the housing ladder.

Stamp duty shake-up was the final straw

According to Alto, 41% of letting agents say they have seen a drop in new first-time registrations and 47% of agents report first-time buyers are more cautious.

One London-based agent told the report: “First-time buyers were already under pressure with rising living costs, high interest rates, and lenders tightening up.

“The stamp duty shake-up was the final straw. It tipped already-stretched buyers over the edge.”

Alto’s research also reveals first-time buyers now account for less than 20% of viewings.

More support for first-time buyers

Riccardo Iannucci-Dawson, chief executive of Alto, says the figures should serve as a “wake-up call” for the government.

He said: “This data should be a wake-up call for policymakers. The goal is to build a fairer, more accessible housing market, we urgently need more targeted support for first time buyers.”

Alto reports that more than half of letting agents (56%) are urging the government to introduce stamp duty relief on properties up to £500,000, 5% deposit mortgage schemes for renters, and more affordable starter homes.