First-time homebuyers in some of the UK’s most expensive areas are rushing to finalize property purchases before April 1, when stamp duty costs are set to rise by an average of £6,300, according to new data from Rightmove.
Demand for homes among first-time buyers in London has risen by 3 percentage points since the last Budget announcement, with many expressing a strong interest in completing transactions by 31 March.
From 1 April, the stamp duty exemption threshold for first-time buyers will fall from £425,000 to £300,000. The change means properties priced above £300,000 will incur stamp duty costs, disproportionately affecting buyers in London, the East of England and the South East of England, where property prices are highest. Rightmove reports that only 8% of homes in London will remain duty-free for first-time buyers after the change, compared to 32% in the east and 24% in the south-east. In contrast, 73% of homes in the Northeast will remain exempt.
Property consultancy Savills estimates that the average first-time buyer in London will see stamp duty costs rise from £2,752 to £9,002, an additional £6,250. Despite the urgency, the average property transaction takes about five months (151 days) to complete, leaving little time for new buyers to finalize purchases before the April deadline, as there are only 124 days until the changes take effect.
Previous changes to stamp duty have led to a surge in property transactions as buyers rush to meet deadlines. Research commissioned by Savills during the 2021 stamp duty holiday showed sales jumped from 143,460 in February to 177,300 in March ahead of the March 31 deadline. Likewise, ahead of the extended July 1 deadline, purchases jumped from 114,800 to 204,370 in June. However, agents note that such a rush can lead to buyers overpaying for properties, sometimes negating stamp duty savings.
Meta Description: First-time buyers in London and other expensive UK areas are rushing to complete home purchases before stamp duty costs rise on April 1. Find out how upcoming tax changes could add an average of £6,300 to property costs.