First time buyers have had little in the way of good news in recent years. Rising house prices, the seemingly unstoppable surge in buy to let and numerous regulatory changes – all of which have led to tighter criteria and more stringent application requirements – have meant the dream of homeownership looked set to stay just that for many would be buyers.

However, chancellor Philip Hammond gave buyers an early Christmas present last year when he revealed in his Autumn Budget that Stamp Duty would be scrapped for all first time buyers of properties up to £300,000.

While many other initiatives in housing have raised questions as to how effective and, indeed, helpful they actually are (the starter homes initiative anyone?) this move is already having a major impact. According to estate agent Countrywide, there’s been a 10% spike in the number of first time buyers registering with the agency compared to the same period last year – and it seems Mr Hammond’s Stamp Duty gift is responsible.

Of course, it’s not just the fact the chancellor has cut Stamp Duty that is giving first timers a boost. It’s also the fact his predecessor did exactly the opposite for landlords. Yes, George Osborne’s proposal to implement a 3% surcharge on the levy – not to mention his all out attack on landlord tax relief – has had a huge impact on the buy to let sector, effectively freeing up homes and improving market fluidity in the process.

According to a report by Property Wire the number of rental properties in England fell by 16% between November 2016 and November 2017. 

So, are we to believe that this year will be the year the ‘lifeblood of the housing market’ finally returns en masse? 

Well, lenders are certainly ready and willing to cater for them – particularly those able to save a little bit more. 

According to Moneyfacts the average five-year fixed mortgage rate for borrowers with a 5% deposit is currently 4.50%. Meanwhile those with a 10% deposit will find the average much lower at 3.26%. On a simple loan of £250,000, that equates to a difference in the monthly repayment of £169.97, or £2,039.63 over the year (based on a 25-year term).

The financial data firm says there are currently 265 residential mortgages at 95% LTV and 660 residential mortgages at 90% LTV. 

So, with the government, it seems, finally recognising the value of first time buyers, landlords forced to take a back seat and lenders competing for custom, 2018 could certainly turn out to be a Happy New Year for new buyers.


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