Rightmove: Reaction to Rumoured Stamp Duty Thresholds
Commentary from Rightmove’s Director of Property Science, Tim Bannister:
“The rumours that “nil rate” and first-time buyer stamp duty thresholds will indeed be reverting to previous levels as of March 2025, rather than be held at their current rates, will no doubt be seen as an unwelcome additional cost by many buyers looking to make their move in 2025 – and potentially to those currently in the process.
With the threshold for the nil rate, the rate at which no stamp duty is charged for home-movers, due to fall from £250,000 to £125,000, anyone purchasing a property over this amount could face paying up to £2,500 more in stamp duty land tax. Meanwhile, the threshold rate at which first-time buyers do not pay stamp duty is likely to fall from £425,000 to £300,000. If a first-time buyer buys a property at the average UK price of £370,759 they will pay £3,538 in stamp duty from March 2025, compared with nothing now.
With the current threshold of £425,000 for first-time buyers, 58% of properties are exempt from stamp duty. If the threshold is reduced to £300,000, only 37% of homes would remain stamp duty-free, a 21% reduction. This will particularly affect buyers in regions with higher property prices, such as London and the South East.
First-time buyers are already under considerable financial pressure, with monthly mortgage payments having risen by over 60% in the past five years, adding an extra £350 per month on average. Although mortgage rates have eased slightly, they remain high compared to previous years, and house prices continue to increase in many areas.
We’re likely to see a rush to complete property transactions before the stamp duty changes come into effect, as buyers look to avoid the additional costs, meaning a busier Christmas and New Year for the housing market. The average time it takes to complete a sale from the moment an offer is accepted is currently 152 days. Coincidentally, this is the same number of days between the Budget on 30th October 2024, and the proposed stamp duty deadline on 31st March 2025. This means that, on average, buyers that agree to a purchase after the Budget may not complete in time unless all involved in the transaction are working together to speed up the process.”
You May Also Enjoy
How much should landlords earmark for maintenance?
Developers lose confidence ahead of Autumn Budget
Could the Autumn Budget dent property values?
Westminster Debate Highlights Urgent Need to Tackle Rogue Builders
Ombudsman welcomes Renters’ Rights Act implementation roadmap
