Beyond Stamp Duty: What first-time buyers really need ahead of the Budget

Leading estate agency group
LRG
has released its first-ever dedicated sales report, revealing a striking disconnect between predicted Budget measures and what first-time buyers actually need to get on the property ladder.

With Chancellor Rachel Reeves set to deliver the Autumn Budget next week, speculation has centred heavily on Stamp Duty reform. Rumoured proposals include
shifting the tax burden from buyers to sellers for properties over £500,000 and introducing an annual property tax to replace the current system altogether.

But LRG’s survey, in excess of 300 buyers and sellers across England and Wales, reveals that changing Stamp Duty isn’t the silver bullet many assume it
to be.

While an overwhelming 95% of respondents – including buyers, sellers and first-time buyers themselves – agree more help should be available for first-time
buyers, Stamp Duty relief ranks as the priority for less than a quarter (23%). Instead, the research uncovers what’s really holding people back. 72% prioritise something other than Stamp Duty, including lower-deposit mortgages, faster mortgage approvals, help
with legal costs and more affordable new builds.

img-13fd0894-d8b6-4a83-a1e0-032463152156

The research also reveals what first-time buyers are doing to get their foot on the ladder. Half are relying on joint ownership arrangements, 43% need
money from family, just over a fifth are looking to new-build incentives and one in seven are exploring shared ownership schemes.

img-8a6fa5b7-6127-4cc6-963d-adff88242341

“First-time buyers aren’t just price-sensitive; it’s about affordability impacted by the current interest rate level and the ability to save deposits.
Due to the high cost of renting restricting their disposable income or the bank of mum and dad drying up, any government incentive for first-time buyers to deliver future homeownership is vital,” says Neil Louth, Chief Executive Officer for The Acorn Group,
part of LRG. “Stamp Duty relief is very important as it’s a huge cost to buyers in general when purchasing their first home or moving home. Stamp Duty will play a major part in their decision process.”

With the Budget just days away, the question remains whether these practical needs will be addressed. Just last week, one of Britain’s biggest housebuilders,
Barratt Redrow, called on the government to introduce a new support scheme for first-time buyers, warning that without intervention, housing targets will remain out of reach. Yet, despite industry lobbying for practical measures like equity loan schemes, much
of the housing-related Budget speculation focuses on Stamp Duty reform.

Neil Louth, who also oversees LRG’s national New Homes division, also confirms the need for a government incentive scheme for new builds, especially apartments.
He adds: “This is reducing the number of sales being agreed and, therefore, developers are delaying building new homes, which is also impacted by construction costs. As a result, the profitability of projects becomes unviable. Ultimately, this will impact
the government’s promise to build 1.5 million homes.”

The practical challenges first-time buyers face came through clearly in the survey responses. One respondent said: “The property needs to be liveable.
As a first-time buyer, getting a deposit is almost impossible, so having a place that’s ready to move into without serious renovation work is essential.”

LRG’s research serves as a timely reminder that effective policy must address the full spectrum of barriers facing first-time buyers, not just Stamp Duty.

The Property Pricing in a Pragmatic Market report forms part of LRG’s quarterly property market analysis, tracking buyer and seller behaviour across
its network of local estate agents.