First-time buyers have just two months to benefit from lower stamp duty

First-time buyers in England eager to make the most of reduced stamp duty rates should act now, according to property portal Zoopla.

Zoopla suggests that with the average home sale taking 25 weeks from listing through to completion, those stepping on to the property ladder have just two months left to benefit.

Thousands of first-time buyers gained when stamp duty land tax (SDLT) rates were temporarily reduced in the infamous 2022 mini budget.

Stamp duty rates will return to their previous thresholds from April 1, 2025, assuming no further changes are announced in the autumn budget.

As a result, the number of first-time buyers liable to pay SDLT will increase as the nil-rate threshold reduces from £425,000 to £300,000.

First-time buyers purchasing homes priced between £500,000 and £625,000 will also lose their eligibility for first-time buyer relief.

These changes mean a third of first-time buyers in England will pay more stamp duty from April next year than they do today.

Stamp duty remains essentially a tax on moving home in southern England, with 81 per cent of total SDLT receipts coming from this area.

From April 1, 2025, the average first-time buyer in London will face a stamp duty bill of £5,600.

In the south east the sum will be £1,390 and in the east it will total £1,040, compared to £0 today.

In some areas of London, first-time buyers could pay an additional £15,000 in stamp duty once the planned changes come in and there is no change announced in the autumn budget.

Lower mortgage rates have reduced the average monthly mortgage repayment from £1,076 12 months ago to £979 today for a typical first-time buyer home.

First-time buyers in the south east and east of England buying ahead of the stamp duty changes will save close to one month’s worth of mortgage payments in SDLT, while those in London could save the equivalent of 3.5 monthly mortgage payments.

Izabella Lubowiecka, senior property researcher at Zoopla says: “Thousands of first-time buyers have benefitted from the relief in stamp duty introduced in 2022.

“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.

“This is 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 April 1, should make sure they build the additional stamp duty fees into their plans and account for it in their overall budgets.”