That’s according to the Skipton Group, which has published its latest Home Affordability Index report.
The report highlighted that the proportion of local authority areas (LAs) where the average first-time buyer property is subject to stamp duty is set to nearly quadruple overnight, rising from 8.4% to 32%.
What’s changing?
From 1st April, the stamp duty threshold for first-time buyers in England will fall from £425,000 back to £300,000, adding £6,250 to the cost of buying a first home worth £425,000.
The report also revealed that almost 90% of potential first-time buyers across Great Britain cannot afford to buy a first-time home in their local area based on their personal financial situation.
Six of the 10 least affordable areas for first-time buyers are in Wales whereas Scotland dominates the most affordable areas, with only Manchester bucking this trend.
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Affordability challenges
Aberdeen is the most affordable local authority area across Great Britain, where three in 10 potential first-time buyers can take the first step on the property ladder. This drops to just three in 100 in Ceredigion, the least affordable area.
Skipton added that four in 10 potential first-time buyers are spending over 45% of their income on essential housing costs.
And only 7.8% of households with earnings below £23,400 can afford to take the first, or next step, on the property ladder in their local areas.
In the most affordable local authorities, aspiring homeowners are around eight times more likely to be able to take the first step on the property ladder than those in the least affordable.
Stuart Haire, Skipton Group CEO, said: “The first step onto the property ladder remains by far the hardest with almost 90% of potential first-time buyers across Great Britain being unable to afford to get on the property ladder without additional help.
“Today’s analysis shows that this chronic lack of affordability is about to get even worse. The upcoming stamp duty reforms, due on 1st April 2025, will further hurt first-time buyers and government schemes designed to help more people onto the housing ladder – such as the Lifetime ISA – risk becoming as obsolete as a fax machine if house prices continue to grow.
“We know the public finances are tight, but we urge the government not to move the goalposts and exacerbate the pain already being felt by first-time buyers. We are calling on the government to maintain the current nil rate stamp duty threshold of £425,000 for people buying their first home, and to uprate this threshold in line with inflation each year.”
