Time is running out for first-time buyers looking to save big on their property purchase. According to new research from Zoopla1, buyers have just two months left to take advantage of the current stamp duty relief before rates rise, potentially saving as much as £15,000.
From 1st April 2025, Stamp Duty Land Tax (SDLT) rates will revert to their previous levels, leading to thousands of pounds in extra costs for first-time buyers in certain areas.2
Biggest Impact in Southern England
The upcoming changes are expected to hit buyers hardest in London, the South East, and the East of England. In some of the most expensive London boroughs, such as Camden, Islington, and Hammersmith & Fulham, buyers could see their stamp duty bills increase by up to £15,000.1 Currently, first-time buyers pay no stamp duty on properties up to £425,000, but this threshold will fall to £300,000 after April 2025. Furthermore, homes priced between £500,000 and £625,000 will no longer be eligible for first-time buyer relief at all.1
Rising Costs on the Horizon
According to the research1, the typical first-time buyer in London, the average stamp duty bill will rise to £5,600 after April 2025. Meanwhile, those in the South East and East of England will face average bills of £1,390 and £1,040, respectively. Buyers in these regions could possibly make significant savings by acting now and securing their purchase before the new rates come into effect.
Lower Mortgage Rates Provide Added Advantage
With mortgage rates having improved slightly in recent months3, first-time buyers in Southern England stand to benefit even further by purchasing before the end of the reduced Stamp Duty rates. Average monthly mortgage repayments have dropped from £1,076 to £979 for a typical first-time buyer home, meaning that buyers in London could save the equivalent of 3.5 months of mortgage payments simply by avoiding the looming stamp duty changes1.
Time is Running Out
First-time buyers need to move quickly. According to Zoopla1, the average time to complete a property transaction is 25 weeks, meaning that offers made after the end of November could risk missing the deadline. Those looking to buy in 2025 should prepare for the increased stamp duty costs.
The North and Midlands Remain Unaffected
While Southern England will bear the brunt of these changes, the vast majority of first-time buyers in Northern England and the Midlands will remain unaffected. Around 95% of buyers in these regions are seeking homes priced below £300,000, meaning they will still qualify for stamp duty relief after April1.
What Should You Do?
If you or someone you know is looking to buy their first home, it’s important to act now to be in with a chance of making a saving where possible – whilst there’s no guarantee that the home purchase will beat the deadline, by starting the buying journey sooner rather than later can help mitigate paying additional Stamp Duty.
Use our Stamp Duty Calculator below to check how much you may pay:
Stamp Duty Calculator – Bluebell Mortgages
Sources
- Zoopla (2024) Two months left for first-time buyers to save up to £15,000 in stamp duty. Available at: https://www.zoopla.co.uk/press/releases/two-months-left-for-first-time-buyers-to-save-up-to-gbp15-000-in-stamp-duty/ [Accessed 19th September 2024]
- Gov.UK (2024) Stamp Duty Land Tax. Available at: https://www.gov.uk/stamp-duty-land-tax/residential-property-rates [Accessed 19th September 2024]
- HOA (2024) Mortgage rate forecast 2024: Will rates go down?. Available at: https://hoa.org.uk/advice/guides-for-homeowners/for-owners/mortgage-rate-forecast/ [Accessed 19th September 2024]
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