Currently, around 58% of homes for sale in England have stamp duty relief for first-time buyers, but there is variation by region, according to a report from Rightmove.
The Conservative Government changed the threshold for first-time buyer stamp duty relief in 2022, with the nil-rate threshold rising from £300,000 to £425,000. However, it is set to expire in April 2025.
From April 2025, this nil-rate threshold will fall back to £300,000, leading to a 21% fall in properties that are eligible for stamp duty relief, Rightmove said.
The South West and East of England would be the most impacted, both seeing a 24% fall in properties that would be eligible for stamp duty relief.
The North East is the least impacted, with a 12% fall, followed by Yorkshire and the Humber and the North West with a decrease of 18% each.
Wellness and wellbeing holidays: Travel insurance is essential for your peace of mind
Out of the pandemic lockdowns, there’s a greater emphasis on wellbeing and wellness, with
Sponsored by Post Office
In London, fewer than one in 10 homes would be eligible for stamp duty relief if the thresholds revert, Rightmove said.
The firm stated that, since 2010, the average asking price of a home has risen by 62% from £230,592 to £373,493, so a first-time buyer would pay £3,675 in stamp duty as opposed to nothing now.
Rightmove said it welcomed Government proposals to help first-time buyers, including giving first-time buyers first dibs on developments, along with housebuilding targets and planning reforms.
It added that while there are limitations of the Mortgage Guarantee Scheme, which Labour pledged to make permanent as part of its manifesto, it did give first-time buyers “confidence that it is an option for them”.
However, Rightmove said that there is an “opportunity to go further in supporting first-time buyers” by making stamp duty threshold changes permanent, and that the Government should review mortgage affordability criteria and support for product innovations that would help this segment.
‘Stamp duty is a barrier to movement’
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.
“Mobility and housing is an important growth engine for the overall economy. We’re looking forward to lending our support to any policies being considered, by providing our market-leading data to help assess the impact different policies could have.”
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.”
This article was first published on YourMoney.com‘s sister site, Mortgage Solutions. Read: Only a third of homes will be eligible for FTB stamp duty relief when thresholds revert
