First-time buyers dominated the property market in late 2024 and early 2025, rushing to take advantage of stamp duty relief before it changes in April.
According to data from comparison site reallymoving, first-time buyers accounted for 64% of home mover activity in December, marking a record high. In January, they still made up 63% of the market, despite ongoing affordability challenges.
The key driver? Lower mortgage rates and the impending stamp duty deadline. From 1 April, the tax-free threshold for first-time buyers will drop from £425,000 to £300,000, meaning many will face unexpected costs.
For homes priced over £300,000, buyers will pay 5% tax on the portion above this amount. As a result, the proportion of first-time buyers paying stamp duty will rise from 17% to 40%, with those in London and the South East hit hardest.
In London, where the average first home costs £438,442, stamp duty bills will jump from £672 to £6,922, with nearly 80% of first-time buyers affected.
In the South East, where first homes average £330,441, buyers who previously paid nothing will now face an average stamp duty bill of £1,522.
Advice for Buyers
Rob Houghton, CEO of reallymoving, warns that time is running out for buyers hoping to benefit from the current threshold.
“The homebuying process takes longer than it used to, and many first-time buyers will be disappointed if they don’t complete in time. If you're purchasing above £300,000 and haven’t progressed far in the process, make sure your budget allows for potential higher costs.”
If you're thinking of buying your first home, now is the time to review your finances, explore mortgage options, and act fast. Need guidance? Speak to The Mortgage Social to ensure you're prepared for the upcoming changes.
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