A new report released by HMRC has revealed the impact of stamp duty relief for first-time buyers (FTBs) introduced in 2017.

On 22 November 2017, as part of the Autumn Budget, then chancellor Philip Hammond announced a permanent relief from stamp duty for FTBs. The relief was a full exemption from paying Stamp Duty Land Tax (SDLT) for transactions at or below the value of £300,000, with property transactions taking place between £300,000 and £500,000 benefitting from a flat £5,000 of relief relative to home movers. 

The policy has undergone various changes and adjustments since, but the evaluation commissioned by HMRC found that in the £125,001 to £300,000 band, the original relief resulted in an 11% increase in transactions over and above the volume of FTB transactions that would have taken place in absence of the policy.

The study also found that the policy led to a 1% increase in the prices that FTBs paid for property transactions in the same mortgage value brand.

In the £300,001 to £500,000 band the analysis pinpointed an 18% increase in transactions over and above the volume of FTB transactions that would have taken place in absence of the policy. However, it did not derive a statistically significant impact on prices paid by FTBs in this mortgage value band.