More than one in every five (22%) first time buyers paid stamp duty so far this year, this despite the temporary extension of nil-rate thresholds, according to Coventry Building Society’s analysis of latest HMRC statistics.
First time buyers currently pay stamp duty if their home costs more than £425,000, which is set to drop to £300,000 in March 2025.
The average first time buyer home in London is £461,450, meaning the stamp duty on an average priced first-time buyer home in London will increase from £1,822 to £8,072 next April.
In the recent Budget, there was no mention to permanently increase the stamp duty thresholds.
Throughout the first three quarters of 2022 (Jan-Sep), before the extended nil-rate thresholds were in place, nearly one in three (27%) first time buyers were paying Stamp Duty.
Commenting on the figure Coventry Building Society Head of Intermediary Relationships Jonathan Stinton, Coventry Building Society, said: “With no action from the Chancellor to make Stamp Duty thresholds permanent, first time buyers are left in an increasingly tough spot. Buyers in London will have to find an extra £6k for the tax on their home come April, which isn’t exactly spare change they have lying around – this is a jolting hike.
“First time buyers need help and support to get on the ladder, but if almost a quarter of them are paying Stamp Duty even the extended thresholds aren’t doing enough. At the very least we would have liked to have seen the thresholds made permanent in yesterday’s announcement, even if it was just for first time buyers, as they can be the catalyst for additional property activity.
“First time buyers who can’t move before next March will need to ready themselves for the hike. It could be a lot to try and save, so many new buyers may turn to family to make up the difference – putting even more pressure on the Bank of Mum and Dad.”
