Property portal Rightmove has asked the Government to retain the first-time buyer stamp duty threshold at its current level of £425,000.
Currently, a first-time buyer pays no stamp duty on properties up to £425,000, but this is due to drop back to £300,000 from April 2025.
However, analysis shows that only 37% of homes for sale will be eligible for first-time buyer stamp duty relief in England if the threshold does return to £300,000 next April, down from 58% of homes that currently benefit (though it varies significantly by region).
Not keeping pace
Since 2010, the average asking price of a home has risen by 62%, from £230,592 to £373,493, said Rightmove.
A first-time buyer would pay £3,675 in stamp duty in 2025 if they bought a home at that price, compared with nothing now.
According to UK Finance, around a third of first-time buyers now purchase properties over £300,000.
Unsurprisingly, the South and East of England would be most impacted by the change, while the North East would be the least impacted.
In London, fewer than one in 10 homes will be free from a stamp duty charge to first-time buyers in April 2025 if the old thresholds return, compared to a quarter now.
Keep the thresholds
Rightmove is asking the Government to consider retaining the existing stamp duty thresholds and providing additional help for first-time buyers.
The property portal welcomes Government proposals to help first-time buyers, including its initiative to give local first-time buyers the first chance to buy homes on developments, housebuilding targets and planning reforms.
But it said the Government should go further, supporting first-time buyers by retaining the existing stamp duty thresholds.
Johan Svanstrom, Rightmove’s CEO, said: “We welcome the new Government’s meaningful ambitions for increasing housing supply. It should consider consumer support measures, by retaining the current first-time buyer stamp duty relief threshold of £425,000 in England, and looking at solutions to help first-time buyers with not only their deposit, but also being able to borrow enough from a lender.”
Tim Bannister, Rightmove’s property expert, added: “The housing market is made up of many connected pieces – as owning your first home becomes more difficult, some people rent for longer, which places an additional strain on the rental sector.
“Stamp duty is a barrier to movement, and keeping the existing thresholds seems like a logical step to providing some first-time buyer support. Even greater stamp duty reforms in the future could have wider implications, such as helping those who are considering downsizing.”
