The property portal worked out that, given that the average property sale takes 25 weeks from listing through to completion, first-time buyers in England “effectively” have just two months left to benefit from reduced stamp duty rates.
In reality, the tax rates rise from 1 April, but Zoopla is reminding buyers of the long lead times between viewing a house and picking up the keys.
Stamp duty rates were temporarily reduced in the 2022 mini Budget, but are set to return to their previous level in six months.
Zoopla said that a first-time buyer purchasing a £425,000 property will pay nothing today but would need to fork out £6,205 in stamp duty land tax (SDLT) from 1 April 2025.
The number of first-time buyers liable to pay SDLT will increase as the nil-rate threshold reduces from £425,000 to £300,000. Those buying homes priced between £500,000 and £625,000 will also lose their eligibility for first-time buyer relief. It will mean a third of first-time buyers in England will pay more stamp duty from April next year than today.
Most impacted
The impact of this change will be greatest in Southern England, where buyers usually spend more on property, with first-time buyers in London, the South East and the East of England most affected.
The average first-time buyer in London will face a stamp duty bill of £5,600, while it will be £1,390 in the South East and £1,040 in the East of England, compared to nothing today.
Those buying in Camden, Hammersmith and Fulham, and Islington will see stamp duty increase by an average of £15,000.
At the other end of the scale, most buyers in the North of England and the East and West Midlands won’t be affected by the changes on 1 April 2025. The vast majority (95%) of first-time buyers in these regions are currently looking for homes below £300,000 and therefore will not be impacted by the incoming changes.
Rise in demand
First-time buyer demand rose by 20% in July compared to a year earlier, said Zoopla, which it suggested indicates that “many first-time buyers have been capitalising on the reduced SDLT rates and improvements in mortgage rates”.
Izabella Lubowiecka, senior property researcher at Zoopla, said: “With just two months to go, those looking to purchase their first home should act this autumn if they are to avoid paying more in stamp duty, particularly if they are looking to purchase a home in Southern England, an area where first-time buyers are likely to see a sizable increase in SDLT once the changes come into effect next April.
“Those not looking to purchase until after 1 April should make sure they build the additional stamp duty fees into their plans and account for it in their overall budgets.”
Related: Government urged to retain current £425,000 stamp duty threshold for first-time buyers
