First-time buyers have finally started taking a bigger slice of London’s most exclusive postcodes, as stamp duty changes scare off landlords.
The proportion of prime London home purchases made by first-time buyers went from 22 per cent in the first quarter of the year, up to 34 per cent in the second, according to data from Marsh & Parsons. First-time buyers were the most common type of buyer during the period.
Property investors rushed to complete their property purchases before 1 April, when a higher rate of stamp duty on second homes came into effect. The proportion of sales made to landlords tanked from 36 per cent in the first quarter to 13 per cent in the second.
Marsh & Parsons said "new lifeblood" on the first rung of the property ladder had also encouraged second-steppers; they accounted for 22 per cent of the transactions in the second quarter of the year, compared to nine per cent at the beginning of 2016.
David Brown, chief executive of Marsh & Parsons, said: "We're often surrounded by stories of what a raw deal first-time buyers get – particularly in the capital – so it was encouraging to see them dominate the market in the second quarter of the year.
"For all the hurdles that stand in the way of prospective purchasers there are plenty of other positive factors such as historically low interest rates to help soften the blow."
First-time buyers were most active in areas slightly removed from the centre of the capital; investors still made up the largest proportion of sales – 31 per cent – in prime central London locations.
Interest from investors may well rise again due to the weakness of sterling, Brown said, if overseas landlords consider London an attractive option.