First-time buyers running out of time to save up to £15,000 in Stamp Duty

Temporary first-time buyers’ relief is expected to end on 31 March 2025 and will affect those in Southern England the most.

First-time buyers may only have two months left to take advantage of the temporarily heightened nil-rate threshold for Stamp Duty, according to data from property website, Zoopla.

Thousands have already benefitted from first-time buyers’ relief, which was introduced as part of the previous Government’s mini-Budget in September 2022.

Currently, first-time buyers in England don’t pay Stamp Duty on properties valued up to £425,000, or on the first £425,000 of properties worth up to £625,000.

However, this relief is due to end on 31 March 2025, when the nil-rate threshold will reduce to £300,000 and those buying properties costing between £500,000 and £625,000 will no longer be eligible.

With Zoopla revealing the average property sale in England takes 25 weeks from listing to completion, this means it could soon be too late for some to save on Stamp Duty.

Southern buyers hit hardest

The South of England could be the region most affected by first-time buyers’ relief coming to an end as it currently accounts for 81% of all SDLT receipts.

This is largely due to higher house prices pulling more first-time buyers over the nil-rate band.

According to Zoopla, the average house price first-time buyers in the South East and the East of England are looking to purchase is £450,000, meaning they would currently owe £1,250 in Stamp Duty. However, from 1 April 2025, this bill is estimated to be six times higher at £7,500.

Those looking to buy their first property in London could see a more severe increase. Higher average house prices for properties first-time buyers are looking to buy in boroughs such as Camden, Hammersmith and Fulham, and Islington could see Stamp Duty bills rise by as much as £15,000 under the new thresholds.

Meanwhile, first-time buyers in the Midlands and North of England could find themselves largely unaffected by the change, with the majority of house prices in these regions already below the original £300,000 threshold.

Is now the time to buy?

First-time buyers may be tempted to buy quickly to avoid the added expense of Stamp Duty, and with mortgage rates continuing to fall, now could be a good time to get on the property ladder.

As of today, the average rates for two- and five-year fixed rate mortgages stand at 5.47% and 5.13% respectively. This is down from a month ago, when two- and five-year fixed deals were at 5.64% and 5.27% respectively.

That being said, it’s important to carefully consider your options before making any hasty decisions, even if this means waiting until the new Stamp Duty thresholds take effect before buying.

“Those not looking to purchase until after 1st April, should make sure they build the additional stamp duty fees into their plans and account for it in their overall budgets,” commented Izabella Lubowiecka, Senior Property Researcher at Zoopla.

Whether you’re looking to purchase a property now or are watching the market in preparation to buy next year, our mortgage charts are regularly updated to show the latest rates available, including first-time buyer deals.

You can also visit our weekly mortgage roundup for more information on the lowest-priced deals.

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