Chancellor Rachel Reeves is expected to scrap the temporary increase to the threshold at which people start paying stamp duty, which was introduced in Liz Truss’ 2022 mini Budget and is due to expire at the end of March 2025.
Once this ends, first-time buyers will pay stamp duty on the portion of any purchase above £300,000, rather than £425,000. For all other buyers, stamp duty will be payable on property above £125,000 instead of the current £250,000.
Research from Leeds Building Society shows that 93% of properties will be above the new threshold, up from 70% under current rules.
There are regional variations, however.
Andrew Greenwood, deputy chief executive of Leeds Building Society, says that those in London will be most affected, with those renting in the capital needing to spend an extra 12 months saving if they’re renting a property once the stamp duty thresholds change.
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He added that there needs to be a long-term plan to improve stability in the housing market so that everyone can have a place to call home.
“We welcome the Labour Government’s commitment to social and affordable housing and renewed interest in housebuilding, but our country needs to develop a long-term and joined-up plan to improve stability in the housing market if we are to solve the problem.
“This needs to be a plan focused on delivering more homes, supporting first-time buyers to save for their deposit and extending affordable routes into homeownership,” he said.
First-time buyers will feel the sting
First-time buyers are some of the most affected by the change.
Figures from Rightmove, the estate agency portal, show that if the current stamp duty thresholds are not made permanent during the Budget tomorrow (30 October), the average first-time buyer will pay £3,538 in stamp duty compared with nothing now, with the percentage of first-time buyers paying the tax increasing from 40% to 61%.
Tim Bannister, Rightmove’s property expert, said that removal of the temporary threshold “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.”
This article was first published on YourMoney.com‘s sister site, Mortgage Solutions. Read: Nine in 10 set to pay stamp duty after Budget changes – Leeds BS
