Stamp duty changes drive increased demand from first-time buyers

First-time buyers are racing to beat upcoming stamp duty changes, according to Rightmove.

The property portal says buyers in higher-priced areas of England, such as London, are set to be most affected by the changes.

The Budget confirmed that, from April next year, stamp duty thresholds in England will be lowered. For first-time buyers, the exemption threshold will drop from £425,000 to £300,000, while for standard residential properties, it will fall from £250,000 to £125,000.

For landlords, the stamp duty surcharge on additional homes was increased in the Budget from 3% to 5%.

Uptick in first-time buyer demand

According to Rightmove, from April, only 8% of homes for sale in London will be stamp-duty-free for first-time buyers. In the South East, 24% of homes will be stamp-duty free and 32% in the East of England.

Research from Rightmove reveals these areas have seen an uptick in first-time buyer demand since the Budget, suggesting some first-time buyers are rushing to avoid paying higher charges. Before the Autumn Budget, first-time buyer demand in London was 28% ahead of last year – now, it is +31% ahead.

In the East of England, the trend has moved from +28%, to +32% ahead of the same period last year since the Budget, and in the South East, first-time buyer demand has ticked up from 23% ahead of last year pre-Budget, to 24% ahead post-Budget.

The upward trend compares with most other areas of England that have seen a decline in demand since the Budget, except for the North East.

Avoid higher charges

Tim Bannister, Rightmove’s property expert said: “With stamp duty thresholds in England lowering from April, we’re seeing early signs of first-time buyers reacting. In London and higher-priced areas, where first-time buyers are most likely to be affected, we’re seeing some pull forward their plans to try and avoid higher charges.

“In most other areas of England, which have a greater availability of stamp duty-free homes for first-time buyers, we’re seeing the opposite trend of some first-time buyers taking a pause for breath with no further help announced in the Autumn Budget.

“However, the long-awaited second Bank Rate cut should hopefully boost optimism amongst movers and help to improve affordability during 2025.”

Little support for first-time buyers in Budget

According to Rightmove, rising stamp duty charges are likely to have less impact in areas with a wider availability of homes below the £300,000 threshold.

The property portal also says the Budget offered little market support for first-time buyers, which may be contributing to some buyers pulling back.

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