First-Time Buyers: Two Months Left to Save up to £15,000 in Stamp Duty

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.

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 19^th 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 19^thSeptember 2024].

All the information in this article is correct as of the publish date 26^th September 2024. The opinions expressed in this publication are those of the authors. The information provided in this article, including text, graphics and images does not, and is not intended to, substitute advice; instead, all information, content, and materials available in this article are for general informational purposes only. Information in this article may not constitute the most up-to-date legal or other information.

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