First-time buyers scramble ahead of stamp duty hike

First-time buyers are rushing to complete property purchases before the stamp duty increase comes into effect in April, Hamptons reveals.

It says that the share of homes bought by first-time buyers across Great Britain surged to a record 31.8% in November and December 2024, driven by the impending tax changes.

The Autumn Budget announced a reduction in the stamp duty threshold for first-time buyers from £425,000 to £300,000, which boosted the number of first-time buyers liable for the tax.

This has spurred a surge in activity, particularly among those purchasing more expensive homes.

Dash for the finish line

Aneisha Beveridge, the head of research at Hamptons, said: “First-time buyers are making a dash for the finish line before stamp duty bills increase in April.

“We’ve seen a particular uptick in purchases over £425,000, where new buyers face the biggest tax bill hikes.

“Movers, on the other hand, are in less of a hurry and have generally been more successful in negotiating bigger discounts to mitigate against a tax bill increase of up to £2,500.”

She added: “With completion times averaging around four months, many of those agreeing sales now find themselves cutting it fine.

“Someone buying a freehold house will be more likely than someone buying a flat to complete before the end of March, with leasehold conveyancing times usually adding an extra month to the sale.”

First-time buyers purchasing expensive properties

The data reveals a significant surge in first-time buyers purchasing more expensive properties, particularly those exceeding £425,000, where the potential stamp duty savings are most substantial.

Hamptons says that a first-time buyer purchasing a £625,000 home will face a substantial £11,250 increase in their stamp duty bill from April.

This urgency is reflected in the figures: first-time buyers acquired a record 20.8% of homes priced over £425,000 in November and December, a sharp increase from 17.5% for 2024 and 14.5% in 2023.

In November and December last year, 10% of first-time buyers purchased homes exceeding £425,000, up from 8% throughout the year.

Impact of the stamp duty change

Conversely, more affordable regions, where the impact of the stamp duty change on first-time buyers is minimal, witnessed a decline in the proportion of new homeowners.

In Wales, the share of homes bought by first-time buyers decreased from 23% in 2024 to 19% in the final two months.

A similar trend was observed in the North East, the most affordable region, with a decline from 18% to 17%.

Here, only 3% of first-time buyers will be subject to stamp duty from April, a slight increase from the current 1%.

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