"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."
- Neil Louth - The Acorn Group
Estate agency group LRG has published its first dedicated sales report, exposing a significant gap between rumoured Budget measures and the support first-time buyers actually need to purchase their first home.
Chancellor Rachel Reeves is due to deliver the Autumn Budget next week, with much speculation focused on stamp duty reform. Proposals under discussion include shifting the tax burden from buyers to sellers for properties above £500,000 and replacing the current system with an annual property tax.
However, LRG's survey of more than 300 buyers and sellers across England and Wales shows that changing stamp duty is not the solution many assume. While 95% of respondents, including buyers, sellers and first-time buyers themselves, agree that more help should be available for first-time buyers, stamp duty relief ranks as the priority for less than a quarter at 23%.
The research reveals what is genuinely preventing people from buying. 72% prioritise something other than stamp duty, such as lower-deposit mortgages, faster mortgage approvals, help with legal costs and more affordable new builds.
The study also shows what first-time buyers are doing to reach the property ladder. Half are relying on joint ownership arrangements, while 43% need money from family. Just over a fifth are looking to new-build incentives and one in seven are exploring shared ownership schemes.
"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," said Neil Louth, chief executive officer for The Acorn Group, part of LRG. "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. 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. Last week, Barratt Redrow, one of Britain's biggest housebuilders, called on the government to introduce a new support scheme for first-time buyers. The company warned that without intervention, housing targets will remain out of reach. Despite industry lobbying for practical measures like equity loan schemes, much of the housing-related Budget speculation continues to focus on stamp duty reform.
Louth, who also oversees LRG's national New Homes division, confirmed the need for a government incentive scheme for new builds, particularly apartments. "This is reducing the number of sales being agreed and, therefore, developers are delaying building new homes, which is also impacted by construction costs," he explained. "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 emerged clearly in the survey responses. "The property needs to be liveable," one respondent noted. "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."
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.
