Stamp duty is a barrier to movement
From April 2025, the stamp duty-free threshold is set to reduce back down to £300,000. This will significantly reducing the volume of eligible homes for first-time buyers.
New analysis from Rightmove (https://www.rightmove.co.uk/) has revealed that just 37% of homes for sale will be eligible for first-time buyer stamp duty relief in England when the existing thresholds revert from April 2025.
Currently, a first-time buyer in England pays no stamp duty on properties up to £425,000. This means that the majority (58%) of homes for sale in England are free from stamp duty to first-time buyers. This though, varies significantly by region.
From April 2025, the stamp duty-free threshold is set to reduce back down to £300,000. This means that, based on properties currently for sale, only 37% would be free from stamp duty to first-time buyers. This is a reduction of 21%.
Stamp duty is a barrier to movement
The East of England (where Harlow sits), would be most impacted by the change. The North East would be the least impacted. In London, fewer than one in ten homes will be free from a stamp duty charge to first-time buyers in April 2025 if the old thresholds return. This is compared to a quarter now.
Since 2010, the average asking price of a home has risen by 62%, from £230,592 to £373,493. If purchasing a home at the current average asking price, a first-time buyer will pay £3,675 in stamp duty in 2025, compared with nothing now.
According to UK Finance, around a third of first-time buyers look to purchase properties over £300,000.
Average age of first time buyers
The average age of a first-time buyer has been increasing over time. The average age of a first-time buyer is now 33 according to UK Finance data. This compares with 31 in 2010.
Firstly, this is due to rising costs.
Secondly, this is due to high interest rates.
New government proposals
Jukes Estate Agents Harlow welcomes the new government proposals to help first-time buyers, including its initiative to give local first-time buyers the first chance to buy homes on developments. Its housebuilding targets and planning reforms should also positively impact those buying for the first time.
Lee Venables (co owner of Jukes Estate Agents Harlow): “We welcome the new government’s meaningful ambitions for increasing housing supply. It should consider consumer support measures, by retaining the current first-time buyer stamp duty relief threshold of £425,000 in England and looking at solutions to help first-time buyers with not only their deposit but also being able to borrow enough from a lender.
“Mobility and housing is an important growth engine for the overall economy. We’re looking forward to lending our support to any policies being considered, by providing our market-leading data to help assess the impact different policies could have.”
Geoff Flewers (co owner of Jukes Estate Agents Harlow): “The housing market is made up of many connected pieces – as owning your first home becomes more difficult, some people rent for longer, which places an additional strain on the rental sector.
“Stamp duty is a barrier to movement, and keeping the existing thresholds seems like a logical step to providing some first-time buyer support. Even greater stamp duty reforms in the future could have wider implications, such as helping those who are considering downsizing.”