Time is running out for first-time buyers to secure their first home before changes to stamp duty land tax (SDLT) come into force from the beginning of April.
Currently, first-time buyers pay no stamp duty on homes worth up to £425,000, with a 5% rate applying to the portion between £425,001 and £625,000.
From 1 April 2025, the zero-rate threshold will drop to £300,000, and the 5% rate of SDLT will apply to property purchases between £300,001 and £500,000.
This means that first-time buyers will go from paying nothing in SDLT on a home worth £425,000 to paying £6,250 in stamp duty after 1 April 2025.
The impact of the changes will be particularly felt by first-time buyers in London, who pay more on average for their first home than those taking their first steps on the ladder elsewhere in the country.
In 2023, the average house price for first-time buyers in London was £492,234, according to the latest figures from comparison website finder.com, while first-time buyers in the South East could expect to pay an average of £353,724 for their first home.
This is significantly higher than the rest of the UK, which saw the average house price for a first-time buyer in 2023 stand at £288,136.
First-Time Buyer Conveyancers Blackheath
Evidence suggests that many first-time buyers are already taking steps to secure their first home before the SDLT changes take effect.
According to a report in Estate Agent Today published on 4 February 2025, first-time buyer activity has hit a record high in recent months, with data showing first-time buyers are acting fast to get deals done and avoid higher property tax bills.
Figures showed that first-time buyers dominated property market activity in November, December and January, accounting for 64% of home mover activity in December 2024 – a record high – and 63% in January 2025.
The report, which cites data from comparison website reallymoving, suggests that the proportion of first-time buyers paying stamp duty will more than double from 17% currently to 40% in April.
In the South East, average SDLT bills will rise from zero to £1,522 – putting 56% of first-time buyers over the tax threshold.
In London, the proportion of first-time buyers paying the tax will jump from 46% currently to 79% after the changes to SDLT rates.
First-time buyers must act fast if they are hoping to beat the increases, or factor in the additional cost of a property purchase made after the SDLT changes take effect.
Find out more about conveyancing for first-time buyers and read our tips and hints in our Guide for First-Time Buyers.
First-Time Buyers London
Indications suggest that 2025 will remain challenging for those looking to take their first steps on the property ladder, particularly in London and the South East where a lack of supply means property prices remain high.
However, first-time buyers in the capital and the surrounding areas have some reasons to remain optimistic.
The government recently announced that it was aiming to build almost 100,000 new homes in London, including 2,575 in Greenwich, as part of its commitment to creating 1.5 million new homes in England by 2029.
The Leasehold and Freehold Reform Act 2024 which is expected to come into force in Spring 2025 will introduce a series of changes that should make buying a leasehold property more appealing to first-time buyers.
Greater transparency over service charges, new ‘peppercorn’ ground rents, and easier and cheaper lease extensions are all set to make buying a leasehold property a better option.
Read more about leasehold reform in our previous blog by clicking here.
Conveyancing Solicitors Blackheath
From our offices in Blackheath Village, Beverley Morris & Co. Solicitors have provided conveyancing services to individuals and businesses across London and the South East for many years.
Our dedicated residential property solicitors can advise on all the legal issues you may encounter during the conveyancing process. They will provide clear, practical, and pragmatic advice should any issues occur.
Beverley Morris & Co.’s conveyancing specialists are accredited under the Law Society’s Conveyancing Quality Scheme (CQS), so you can rest assured that you have direct access to expert help.
Our Residential Property team can help you with:
- Buying and Selling.
- Mortgages and Re-mortgages.
- Transfers of Equity.
- Lease Extensions.
- Collective Purchases of Freehold.
- New Build Sales and Purchases.
We have developed in-depth local market knowledge and enjoy strong relationships with estate agents and other industry professionals working in the surrounding area.
To speak to our Residential Conveyancing solicitors, please call us on 020 8852 4433 or make an online enquiry.