First-time homebuyers in London could face a significant increase in stamp duty next year, with rates set to rise by up to £15,000 for properties priced around £625,000. The increase, set to take effect on 1 April 2025, will end the current relief introduced during the 2022 mini-budget. Buyers in areas like Camden, Hammersmith, and Islington are expected to be hit hardest, as the stamp duty nil-rate threshold drops from £425,000 to £300,000, potentially pushing up costs across Southern England.
The changes are expected to disproportionately affect homebuyers in London, the South East, and East of England, where property prices are significantly higher than the national average. In London, the average first-time buyer could face a stamp duty bill of £5,600 from April, compared to no tax today. Certain boroughs, such as Camden and Hammersmith and Fulham, will see buyers charged up to £24,875, a £15,000 increase from current levels.
Zoopla data suggests that many first-time buyers are rushing to take advantage of the current stamp duty savings, as well as improving mortgage rates. First-time buyer demand surged by 20% in July 2024 compared to the same period in 2023.
Izabella Lubowiecka, Senior Property Researcher at Zoopla, urged potential buyers to act quickly to avoid the higher costs. “Thousands have benefited from the relief introduced in 2022. With just two months left, buyers should move this autumn to lock in the savings before the increase.”
While buyers in Northern England and the Midlands will largely remain unaffected—thanks to lower average house prices—those in the south are bracing for a sizable jump in costs. Property prices in cities like Manchester and Leeds remain well below the £300,000 threshold, leaving only 5% of buyers in these regions liable for the increased tax.
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