Properties in the UK are now more unaffordable than ever, with figures released by the ONS showing that the average home sold in England cost the equivalent of 8.7 times the average annual disposable income.
The severe under-supply of houses has pushed average prices to a record £294,260 according to recent statistics from Halifax, despite economic uncertainty tightening buyer budgets.
Jonathan Rolande of the National Association of Property Buyers noted that with the low supply and newfound “frenzy” sparked by the Government, there is an increased risk that house prices will spike again as demand soars.
He said: “This budget with giveaways to put more money in people’s pockets and cutting the cost of buying a property means the market is set to hold steady, perhaps even continue its seemingly never-ending upward climb.
“But my fear is that without an increase in the supply of property the unfairness in the market is set to be even more ‘baked in’. Those hoping to take their first step onto the ladder soon, may well just have seen it pulled up ever further out of reach.”
The buyers most likely to benefit from the cut will be those in London and expensive areas of south East England, the figures show. For instance, the average property price in the North East of England according to Savills is £132,798 – meaning buyers weren’t affected by the SDLT before the cut was announced.
In London however, average prices have reached £456,307 – which would mean a £7,815 saving for a first-time buyer – something they can then use to put more towards their deposits.
But as prices are expected to rise, buyers need to watch out they don’t pay over the odds for a home and therefore lose out on any potential savings from the cut.