However, several months have since passed and recent research by the Royal Institution of Chartered Surveyors (RICS) suggests that it may have had very little effect on the housing market.
In fact, 86% of surveyors have reported that they have seen no increases in first-time buyer enquiries since the cut was announced.
As the research was conducted during December, RICS admit there could be seasonal factors influencing the data. However, 66% of surveyors said that they expected the stamp duty to have little or no effect on the number of first-time buyers entering the market.
Uncertain Future For The Scheme
The news comes shortly after Labours shadow housing minister John Healy called for the scheme to be extended to include shared ownership properties.
Simon Rubinsohn, RICS Chief Economist said “The initial feedback from the market doesn’t suggest that the change in the Stamp Duty regime announced in the budget is going to have a material impact on activity. Indeed, the risk was always that a good portion of the benefit would be capitalised in the price, therefore limiting the benefit for the first-time buyer.”
This is bad news for a market which is already showing signs of slowing down as supply outstrips demand.
Government Remains Optimistic
However, the Government remains optimistic about the overall impact of the scheme. A Treasury spokeswoman said: “We want to restore the dream of homeownership for a new generation.
“Over the next five years, our stamp duty cut will help over a million first-time buyers getting onto the housing ladder, with an estimated 16,000 first-time buyer purchases alone since the changes took effect in November.”
Time will tell whether the cut in stamp duty for first-time buyers simply needs to be given longer to work, or if it’s failing to address the real issues that are preventing first-time buyers entering the market.